Wall Street indexes were mixed on Tuesday and the dollar pared its gains after U.S. inflation data strengthened prospects for rate cuts this year, while oil prices surged as unrest in Iran outweighed worries about a supply glut.

U.S. President Donald Trump’s pledge on Monday to impose a 25% tariff rate on any country that does business with Iran, along with his attacks on Federal Reserve independence, added to market uncertainty, keeping investors cautious.

Expensive food and rent lifted the Consumer Price Index 0.3% last month for an annual gain of 2.7%. Core CPI rose 0.2% in December. The readings came in line with expectations and bolstered bets the Federal Reserve had more room to cut.

“These readings reinforce the notion that inflation is moderating, and the Fed may be able to cut rates this year,” said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California.

The Dow Jones Industrial Average fell 0.67%, to 49,256.12, the S&P 500 slipped 0.26%, to 6,958.83 and the Nasdaq Composite lost 0.18%, to 23,691.39.

JPMorgan Kicks off US Bank Earnings

JPMorgan shares initially rose after the largest U.S. lender reported fourth-quarter profit that beat analysts’ expectations. But they then fell as much as 3% in choppy trading after the bank said a proposed cap on credit card interest rates would hurt U.S. consumers and the economy.

Other major earnings releases loom this week, including Bank of New York Mellon, Citigroup and Bank of America.

The banks have warned the rate cap plan could restrict access to credit for millions of American households and small businesses.

Currency traders appeared to have been prepared for a larger increase in prices, said Eric Theoret, currency strategist at Scotiabank in Toronto, noting risk-sensitive currencies, including the Australian dollar, rallied after the report.

The dollar index, which measures the U.S. currency against a basket of currencies, including the yen and the euro, was last up 0.19% to 99.06, with the euro down 0.1% at $1.1655.

The dollar rose on Friday after data showed jobs growth in December, reinforcing expectations the U.S. central bank will wait until after its January policy meeting to cut rates further.

Wall of Worry

Markets have started 2026 with a formidable lineup of geopolitical flashpoints, including Iran, Greenland and Venezuela, adding to concern about record-high equity valuations on benchmarks from New York to London, Tokyo and Frankfurt.

But investors appear content to push markets higher for now, a dynamic strategists call “climbing the wall of worry.”

“The wall of worry has been built anew over the last week in so many different ways. And yet, (the market) is just climbing and climbing,” IG chief market strategist Chris Beauchamp said.

Trump’s pursuit of Federal Reserve Chair Jerome Powell is continuing to raise alarm, with three former Fed chairs signing a statement on Monday decrying the administration’s assault on the central bank’s independence. They warned this is more typical in “emerging economies with weak institutions” and can have highly negative consequences for inflation.

Oil prices scaled multi-week highs on worries that Iran’s exports could decline as the OPEC member that is under sanctions cracks down on anti-government demonstrations. Those concerns were not enough to balance out the prospect of more supply coming from Venezuela after U.S. intervention to oust President Nicolas Maduro. [O/R] Worries over a supply glut this year have taken a back seat for now, said Rystad analyst Janiv Shah.

U.S. crude rose 2.67% to $61.09 a barrel and Brent rose to $65.50 per barrel, up 2.55% on the day.

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(Additional reporting by Karen Brettell and Sinead Carew, Wayne Cole in Sydney and Amanda Cooper in London; Editing by Shri Navaratnam, Susan Fenton, Sharon Singleton, Rod Nickel)