US Open: Indexes Stop on PPI, Banks in the Shadow of Data

The main news of the day, eagerly awaited by the markets, were the key macroeconomic data releases from the United States, which provide important insights into the state of the economy in the last quarter of 2025. In November, producer prices rose by 0.2% month-on-month and 3.0% year-on-year, slightly above market expectations. This reading confirms that underlying price pressures remain and are not easing as quickly as one might expect, suggesting that companies are still facing challenges from rising production costs.

On the other hand, retail sales data came in positively, showing a 0.6% increase compared to October. Consumers remain active and willing to spend, even after excluding the most volatile categories, such as automobiles, fuel, and food services. This is a clear signal that domestic demand continues to drive the U.S. economy and support its growth in the fourth quarter.

This combination of persistent upstream inflation and dynamic consumption suggests that the economy remains on a path of stable growth but also requires caution in monetary policy. For the Federal Reserve, higher-than-expected inflation readings are a strong argument against rushing to cut interest rates. On the contrary, it is likely that the current, relatively high rates could remain unchanged for an extended period, which markets are already beginning to price in.

In response to this news, U.S. stock indices are showing notable weakness today. The Dow Jones is down about 0.2%, the S&P 500 has declined by 0.6%, and the Nasdaq is falling around 0.9%. This reaction reflects market concerns that persistent inflationary pressures could require further restrictive monetary policy, which in turn could slow corporate profit growth and increase financing costs. The Nasdaq, which is heavily weighted with technology companies, is particularly sensitive to higher interest rates, which raise the cost of capital and limit these firms' future growth potential.

Although retail sales indicate healthy consumer demand, the prevailing concern about prolonged high interest rates is influencing caution and market decisions. In the longer term, upcoming consumer inflation reports will be key.

Source: xStation5

Futures for the US500 (S&P 500) are retreating compared to yesterday’s close, mainly in reaction to a higher-than-expected PPI, indicating persistent inflationary pressures and limiting market expectations for rapid Fed rate cuts. Core PPI data above consensus triggered concerns about the continuation of current monetary policy. The RSI indicator is falling to around 50, signaling neutral momentum and the possibility of further correction after December’s record levels.

Source: xStation5

Corporate News

Wells Fargo (WFC.US) reported Q4 2025 results that disappointed the market, as revenue and EPS were below expectations, leading to a decline in its stock price. Nevertheless, the bank posted net profit growth and presents optimistic prospects for 2026, assuming stable spending, increased interest income, and growth in lending and financial markets segments. The removal of regulatory constraints enables further expansion and investment, raising hopes for improved results in the coming year.

Key Q4 2025 Wells Fargo financials:

• Revenue: $21.29 billion
   
• EPS: $1.62
   
• Balance sheet: over $2 trillion
   
• YoY net profit growth driven by interest income
   
• Strong growth in new credit cards and auto loans
   

Citigroup (C.US) reported Q4 2025 results that positively surprised the market. Despite weaker performance in the markets division, the bank showed solid growth in investment banking and wealth management segments. The bank forecasts growth in net interest income in 2026 and maintenance of an efficient cost structure.

Key Q4 2025 Citigroup financials:

• Adjusted EPS: $1.81 vs. expected $1.62
   
• Revenue: $19.9 billion vs. consensus $20.5 billion, up from $19.5 billion YoY
   
• Net interest income (NII): $15.7 billion, +5% QoQ, +14% YoY
   
• Total operating expenses: $13.8 billion vs. $14.3 billion in the previous quarter
   
• Loan loss reserve: $2.22 billion, down from $2.45 billion
   
• Loans: $752 billion, deposits: $1.40 trillion
   
• Segment revenue:
   
  • Services: $5.94 billion, +11% QoQ, +15% YoY
     
  • Markets: $4.54 billion, -18% QoQ, -1% YoY
     
  • Banking: $2.21 billion, +4% QoQ, +78% YoY
     
  • U.S. Consumer Banking: $5.29 billion, +3% YoY
     
  • Wealth Management: $2.13 billion, +7% YoY
     

The bank highlighted that 2025 ended with record revenues and positive operating leverage across all five business segments, with investments driving solid revenue growth.

Bank of America (BAC.US) reported Q4 2025 results that exceeded market expectations. Growth in both interest and non-interest income reflected the resilience of consumers and businesses. The Global Banking and Global Wealth & Investment Management segments posted year-over-year and quarter-over-quarter revenue growth. The bank forecasts 5–7% growth in net interest income and positive operating leverage in 2026.

Key Q4 2025 Bank of America financials:

• EPS: $0.98 vs. expected $0.95
   
• Net interest income (FTE): $15.9 billion, up from $14.5 billion YoY
   
• Non-interest income: $12.6 billion, up from $12.1 billion YoY
   
• Loan loss reserve: $1.31 billion, down from $1.45 billion YoY
   
• Operating expenses: $17.4 billion vs. $16.8 billion in Q4 2024
   
• Deposits: $2.01 trillion
   
• Revenue: $28.40 billion vs. forecast $27.55 billion
   
• Net income: $7.6 billion
   
• Segment revenue:
   
  • Consumer Banking: $11.2 billion, up from $10.6 billion YoY
     
  • Global Wealth & Investment Management: $6.62 billion, up from $6.0 billion YoY
     
  • Global Banking: $6.24 billion, up from $6.10 billion YoY
     
  • Global Markets: $5.32 billion, up from $4.86 billion YoY
     

The bank reported solid credit quality, positive operating leverage, and revenue growth in key segments, which, combined with resilient consumer and business demand, builds optimism for the coming year.