Looking to the Futures

Markets saw turbulence at Monday's open after the Trump administration threatened a US criminal indictment on the Federal Reserve. Equities climbed again yesterday to set an all-time high on the S&P 500 with help from international markets. President Trump also stated that he intends to put a cap on credit card interest rates at 10% for one year starting January 20^th. US economic news will be a major driver of markets this week and global bond yields were mixed to start the week. 

US Equities opened lower to start the week following announcements from Fed Chair Powell that the Fed had been served grand jury subpoenas from the Justice Department late last Friday. Stocks and bonds traded lower at the open with precious metals rallying on concerns of the independence of the Federal Reserve. On Sunday, Fed Chair Powell stated, " The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than the preferences of the president."

Despite this news the S&P 500 was able to rally back to set new all-time highs. International markets provided support yesterday with the Euro Stoxx 50 trading to all-time highs, and China's Shanghai Composite rising +1% to its highest level in over 10-years. 

Credit card companies and bank stocks saw early pullbacks on Monday after President Trump announced that lenders could be capped at 10% interest rates for one year. This announcement set the compliance deadline for January 20^th.

Economic news will drive markets this week with Dec CPI expected to remain unchanged from November at +2.7% y/y. Dec Core CPI is expected to rise to +2.7% y/y from +2.6% y/y in November. Tomorrow, Nov PPI final demand is expected to increase +2.7% y/y, and Nov Core PPI is expected to increase by +2.7% y/y. Nov Retail sales are expected to rise +0.5% m/m. 

Global bond yields were mixed to start the week with the 10-year US Treasury note increasing +2.0 bp to 4.185%. The 10-year German bund yield dropped -2.2 bp to 2.841% and the UK gilt yield fell -0.1 bp to 4.373%.

Looking at the daily chart for the E Mini S&P 500 March 2026 (/ESH26) contract we can see the resilience on the buy side as the contract pushed to new all-time highs. Prices tested the 20-Day Simple Moving Average to start the year and have consistently traded off this level on lower to average volume.

The Daily Technical Summary from Hightower Research has support levels at 6978.13 and 6926.44 with resistance levels at 7053.37 and 7076.93.

According to the CFTC Commitment of Traders Report released January 6^th, asset managers have increased their long position by +6,928 contracts and decreased their short position by -12,443 contracts. Asset managers are net long 961,339 contracts.

The 14-Day Relative Strength Index at 57.76% indicates there are slightly more buyers than sellers but the contract has not moved into overbought territory.

20-Day SMA                    6,933.14

50-Day SMA                    6,888.19

200-Day SMA                  6,457.76

14-Day RSI                       57.76%

Implied Volatility             13.12%

Core CPI 8:30 AM ET

CPI 8:30 AM ET

New Home Sales 10:00 AM ET

NFIB Small Business Optimism 6:00 AM ET

Treasury Budget 2:00 PM ET

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