By Robert Teitelman
President Donald Trump's proposal to cap credit-card interest rates at 10% on Jan. 20 sent stocks of card issuers falling. Many experts believe Congress would have to pass legislation to enact the plan, which hasn't gotten much traction in the past. But, says Matt Schulz, chief consumer finance analyst at LendingTree, this time "feels a little different."
Airline stocks like Delta Air Lines and United Airlines also fell. The reason: Airlines earn billions of dollars a year from card rewards programs; Delta reaped $2 billion from American Express in the third quarter. Credit rewards are funded by various sources, including swipe fees and interest charges, Schulz says. A 10% cap would curtail interest revenue, making issuers more selective about rewarding customers. "The middle class of the rewards space could end up being shut down," he says.
A report from Vanderbilt University found that a 10% cap wouldn't affect rewards for customers with credit scores above 760. In all, Americans would save $100 billion a year on interest expenses at a 10% rate, said Vanderbilt, but customers below 760 would lose $27 billion in rewards. And a 10% cap would affect card issuers differently, depending on their exposure to subprime consumers. "Private label" card companies such as Synchrony Financial and Bread Financial Holdings would be hit the hardest, notes Wells Fargo analyst Mike Mayo. Least affected: American Express, given its more affluent customer base.
--Elizabeth O'Brien
Last Week
Markets
Investors on Monday awoke to find the Department of Justice investigating Federal Reserve Chair Jerome Powell over building renovations; Powell described the probe as a "pretext" for not cutting interest rates further. Gold and silver hit new highs. President Trump said he'd slap 25% tariffs on countries trading with Iran, then said the killings had stopped. Despite the noise, stocks edged up, then sank on mixed bank earnings. On the week, the Dow industrials fell 0.3%; the S&P 500, 0.4%; and the Nasdaq Composite, 0.7%.
Companies
Trump cut Cuba off from Venezuelan oil and said he might ban Exxon Mobil from Venezuela after its CEO called the country "uninvestible." JPMorgan Chase profits fell after weak investment banking revenue and a charge for its takeover of Apple's credit-card portfolio from Goldman Sachs; CEO Jamie Dimon warned that any threat to Fed independence is "probably not a good idea." Trump called for credit-card companies to lower rates for a year to 10% by Jan. 20. A U.S. judge said Orsted's wind project off Rhode Island could resume; another greenlit an Equinor project off Long Island.
Deals
Allegiant Travel is buying Sun Country Airlines for $1 billion...More takeover drama: Paramount Skydance sued Warner Bros. Discovery and threatened a proxy fight as Netflix readied an all-cash $83 billion offer... Saks Global filed for bankruptcy...The Pentagon invested a billion dollars in an L3Harris missile spinoff.
Next Week
Monday 1/19
Equity and fixed-income markets are closed in observance of Martin Luther King Jr. Day.
Tuesday 1/20
Roughly 30 S&P 500 companies report results in the shortened trading week. 3M, Netflix, and United Airlines Holding announce quarterly results on Tuesday, followed by Charles Schwab and Johnson & Johnson on Wednesday. Abbott Laboratories, GE Aerospace, Intel, and Procter & Gamble report earnings on Thursday.
Thursday 1/22
The Bureau of Economic Analysis releases the personal consumption expenditures price index for October and November. Consensus estimate for November is a 2.8% year-over-year gain. The November core PCE, which excludes volatile food and energy prices, is also expected to rise 2.8%.
Friday 1/23
S&P Global releases both its Manufacturing and Services Purchasing Managers' Indexes for January. Economists forecast a 51.8 reading for the Manufacturing PMI and 52.9 for the Services PMI. This compares with readings of 51.8 and 52.5, respectively, in December.
The Numbers
$95 B
The amount of U.S. corporate borrowing in the first full week of January, the most since May 2020.
20%
Apple's smartphone market share in 2024, tops among the five largest manufacturers.
$1.7 T
The total amount of U.S. student loan debt, a record, leading to tighter government lending rules.
$1.2 T
China's record trade surplus in 2025, up 6.6% over 2024, despite exports to the U.S. falling some 20%.
Write to Robert Teitelman at bob.teitelman@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 16, 2026 20:35 ET (01:35 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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