Banks mixed, gold screams, Trump drops Iran tariff bomb

Wednesday's chaos: BofA beats, metals hit records, 25% tariffs shake markets, Bitcoin tops $95K, Fed drama intensifies...

😎 Market Vibes

🚨 Banks Flash Mixed Signals, Gold Goes Bonkers, and Trump Drops a Tariff Bomb

Wednesday's bringing the kind of market action that makes you reach for your coffee twice. Bank earnings are trickling in with more drama than a reality show, precious metals are absolutely screaming to record highs like they know something we don't, and Trump just decided to slap 25% tariffs on anyone doing business with Iran - because apparently Tuesday was too quiet. Bitcoin's finally showing signs of life above $95,000, Treasury yields are playing hard to get despite cooler inflation, and the Fed drama continues with Powell under DOJ investigation. Buckle up, because this market's serving chaos with a side of opportunity.

📥 Banks Serve Up Mixed Earnings While Markets Play It Cool

The market opened Wednesday with traders doing that thing where they stare at their screens and pretend they know what's happening - also known as "cautious trading."

Today's the big day for Bank of America, Wells Fargo, and Citigroup to show us their numbers after JPMorgan already reported yesterday with results that beat expectations despite lower profit year over year. Bank of America just dropped their earnings showing net interest income up 9.7% to $15.92 billion - about $240 million more than analysts expected. Trading desks had a party too, with equities trading revenue jumping 23%.

JPMorgan stock dipped 4.1% as investment banking fees fell short of expectations despite strong trading operations performance.

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🏆 Gold Hits Record Highs While Silver Flexes Its Muscles

If you thought precious metals were done surprising us, think again. Gold just touched $4,600 per ounce with experts now predicting it could blast through $5,000. Silver isn't sitting on the sidelines either - it topped $90 an ounce with its market cap crossing $5 trillion for the first time.

Market observers are calling this a "hard asset" domination phase. Investors are fleeing sovereign debt risks faster than you can say "geopolitical uncertainty."

With Trump's new 25% tariff on countries doing business with Iran adding fuel to the fire, safe-haven demand is through the roof.

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🏃 Bitcoin Plays Catch-Up While Crypto Markets Eye $96,000

Bitcoin is doing that thing where it watches gold and silver party and thinks "my turn." The flagship crypto topped $95,000 for the first time this year, though it's been more muted compared to the precious metals rally. Currently trading around $96,000, Bitcoin is trying to figure out if it's "digital gold" or just fashionably late to the safe-haven party.

Market analysts point out that Bitcoin long-term holders have been heavy sellers over the past year, which explains why the price hasn't gone vertical despite US spot ETFs consistently purchasing more than 100% of new supply.

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🤝 Treasury Yields Hold Firm Despite Cooler Inflation

The bond market is playing hard to get. Despite December CPI coming in at 2.7% year-over-year - exactly in line with expectations - and core CPI at 2.6% (slightly below the 2.7% forecast), the 10-year Treasury yield is stubbornly holding near 4.18%. The 2-year yield slipped to 3.53%, but long-duration bonds are exhibiting what traders call "stubborn stability."

This widening spread between short and long-term rates is classic bull steepening, suggesting the Fed's tightening cycle is in the rearview mirror. But concerns over long-term fiscal health and political risk premiums are keeping benchmark rates elevated. The Department of Justice investigation into Fed Chair Powell is adding an unusual political risk element that markets aren't thrilled about.

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🫨 Trump's Iran Tariffs Shake Up Trade Expectations

Just when you thought tariff drama was taking a breather, President Trump dropped a tariff bomb: 25% tariffs on any country doing business with Iran, effective immediately. This could mean significantly higher prices on goods from China, India, Turkey, the UAE, and other major Iranian trading partners.

China - which accounts for more than 90% of Iran's oil trade according to analysts - is not pleased. The Chinese embassy warned Beijing would take "all necessary measures" to defend its interests.

This new tariff would stack on top of the existing 35% tariff Chinese goods already face, potentially derailing the trade truce agreed upon last October.

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🔎 Fed Watch: Powell Under Pressure But Markets Bet on Pause

The Federal Reserve drama continues to be more gripping than your favorite streaming series. The DOJ investigation into Fed Chair Jerome Powell is adding a layer of political pressure rarely seen in modern central banking. Powell's term as chairman ends in May 2026, and speculation is swirling about whether he'll stay on as a regular Fed governor through January 2028.

Markets are pricing in a 95% probability the Fed will pause at the January 27-28 meeting, with bets more split for March. Current projections have shifted the "first cut" expectations from April to June 2026, as the Fed demands "sustained evidence" that inflation is truly under control.

CME FedWatch data shows traders are still expecting two rate cuts in 2026, but the timeline keeps getting pushed out.

What Traders Are Watching

🔥 What Traders Are Watching This Week

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📌 The Bottom Line

Wednesday's market is serving up a buffet of uncertainty with a side of cautious optimism. Banks are showing strength in their earnings (though let's see how the market digests the rest of them), precious metals are absolutely ripping to record highs, and crypto is finally waking up from its nap. Meanwhile, Trump's Iran tariff announcement is adding spice to an already complicated trade picture, and the Fed drama continues to provide entertainment value.

The big question now: Can markets sustain these levels with all this noise?

✌️ Thanks for vibing with us.

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