Key Takeaways
- President Trump announced a team is headed to Iran and indicated he would announce his Federal Reserve Chair pick tomorrow morning, while also confirming a tentative deal with Senate Democrats to temporarily fund Homeland Security and avert a government shutdown.
- A lawsuit filed by Donald Trump, his sons, and the Trump Organization alleges that an ex-IRS employee illegally leaked their confidential tax returns in 2019-2020, causing significant reputational and financial harm.
- US stock futures experienced a dip in Asia following Apple's (AAPL) warning of potential margin pressure, despite the tech giant forecasting 13%-16% Q2 revenue growth driven by strong iPhone 17 sales, services, and China demand.
- Oil prices paused after a three-day rally, with Brent crude holding above $70 a barrel and WTI near $66, as markets processed President Trump’s renewed military threats towards Iran.
- Japan's December retail sales saw a sharper-than-expected month-over-month decline of 2.0%, while industrial output fell by a modest 0.1% month-over-month.
Trump Administration Developments and Legal Challenges
President Trump made several significant announcements, including that a team is en route to Iran. He also stated he would announce his chosen Federal Reserve Chair tomorrow morning, having selected "a very good person" for the role. These statements come amidst renewed military threats towards Iran, which have already seen oil prices pause after a sharp three-day rally, with Brent holding above $70 a barrel and WTI near $66.
Domestically, President Trump indicated he would know tonight what happens with the government shutdown, having reached a tentative deal with Senate Democrats to temporarily fund Homeland Security for two weeks. This agreement aims to keep the government open while discussions continue on immigration limits. Additionally, Trump authorized tariffs on countries supplying oil to Cuba, escalating pressure on Havana and leveraging trade levies as a foreign policy tool.
In legal news, Donald Trump, his sons, and the Trump Organization have filed a lawsuit alleging that an ex-IRS employee illegally leaked their confidential tax returns to the media in 2019–2020. The lawsuit claims the IRS and Treasury failed to protect these confidential tax returns, causing reputational and financial harm to the plaintiffs.
Tech Sector and Market Reactions
US stock futures experienced a slip in Asia after Apple (AAPL) warned of potential margin pressure, reigniting doubts over whether heavy AI investment will deliver timely returns. Despite this, Apple (AAPL) forecasts a robust 13%–16% Q2 revenue growth, driven by strong demand for the iPhone 17, services, and growth in China. However, the outlook is clouded by warnings on rising memory costs, supply constraints, and weaker performance in Mac and wearables.
In other corporate news, IBM (IBM) successfully raised nearly $7.5 billion via a cross-border bond sale. Strong demand for the offering allowed for tighter pricing, including a long 2056 maturity, signaling what is seen as an early indication of a broader big tech debt wave in 2026 aimed at funding AI and data centers. Meanwhile, Rio Tinto (RIO) is expanding its low-carbon aluminum footprint through a joint acquisition with Chalco (2600.HK) of Votorantim's CBA stake.
Gold and silver prices rose as investors turned cautious on US tech valuations, highlighting a growing split between AI enthusiasm and market realities. The U.S. Dollar slid 0.5% against the Canadian Dollar, hitting a 16-month low at 1.3482. Benchmark 10-year JGB futures rose 0.16 points in early trade.
International Economic Data
Japan's economic data for December showed a mixed picture. Retail sales experienced a significant month-over-month decline of -2.0%, considerably worse than the estimated -0.5%. On a year-over-year basis, retail sales fell by -0.9% against an estimated increase of +0.7%, with department store and supermarket sales also down by -0.1%.
Conversely, Japan's industrial output in December saw a modest month-over-month decline of -0.1%, which was better than the estimated -0.4%. Year-over-year, industrial output increased by +2.6%, surpassing the estimated +2.1%.
In the UK, the Lloyds Business Barometer for January registered at 44, below the estimated 50. However, own price expectations rose to 62 from 59, indicating businesses anticipate higher pricing. The U.S. State Department has also ordered missions to review all aid for compliance with tougher "Mexico City" rules.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.