The Week That Will Shape Markets: CPI, Bank Earnings, and $5.1 Trillion in M&A Under the Microscope

If you thought the first week of 2026 was eventful—with record highs, a jobs report, and Intel's surprise White House meeting—the week ahead may prove even more consequential. Between January 12 and 16, investors will digest the final inflation reading of 2025, parse earnings from America's banking giants, and get their first real look at whether Wall Street's historic dealmaking streak can continue.

The S&P 500 enters the week up nearly 2% for January, riding a two-year winning streak that has delivered back-to-back double-digit gains. What happens over the next five trading days could determine whether that momentum continues or finally exhausts itself.

Tuesday: The CPI Report

The December Consumer Price Index, scheduled for release at 8:30 a.m. Eastern on Tuesday, arrives with unusual significance. It will be the final inflation reading before the Federal Reserve's January 28-29 policy meeting—and it will be scrutinized for signs of whether price pressures are finally cooling toward the Fed's 2% target.

Economists expect headline inflation to hold steady at 2.7% year-over-year, while core inflation (excluding food and energy) is forecast to edge up to 2.7% from 2.6%. Wells Fargo's team expects a monthly increase of 0.35% for headline CPI and 0.36% for core—slightly hotter than November's unusually soft reading.

"This could raise the stakes for Tuesday's release. It will be one of the last key releases before the Federal Reserve's next monetary policy meeting."

— S&P Global Economic Preview

The report also comes with an important caveat: the Bureau of Labor Statistics was unable to collect October 2025 data due to a government funding lapse, creating distortions in recent releases. December's numbers should provide cleaner data and a more accurate picture of inflation's trajectory.

A cooler-than-expected print could support equities, particularly rate-sensitive sectors like technology. A hotter reading may weigh on stocks and raise concerns about prolonged restrictive Fed policy.

Bank Earnings: The Main Event

The fourth-quarter earnings season officially launches this week with a murderer's row of financial giants reporting results. The schedule reads like a Who's Who of American finance:

• Tuesday, January 13: JPMorgan Chase, Delta Air Lines, Bank of New York Mellon
• Wednesday, January 14: Citigroup, Wells Fargo, Bank of America
• Thursday, January 15: Morgan Stanley, Goldman Sachs, BlackRock
• Friday, January 16: State Street, PNC Financial Services, Regions Financial

All eyes will be on JPMorgan Chase, the nation's largest bank by assets. Analysts expect earnings per share between $4.87 and $5.01, but the real focus will be forward guidance and CEO Jamie Dimon's assessment of the economic landscape.

JPMorgan enters earnings with a complication: the bank recently completed its acquisition of the Apple Card portfolio from Goldman Sachs, which could result in a $2.2 billion provision for credit losses. Investors will want to understand how this one-time charge affects the quarter's results.

The M&A Question

Perhaps no aspect of bank earnings will receive more scrutiny than investment banking revenue—and specifically, whether 2025's dealmaking renaissance can continue.

After a multi-year drought, global M&A volume surged 42% year-over-year in 2025 to reach $5.1 trillion. This resurgence has been a primary driver of bank profitability, with advisory fees and capital markets revenue helping offset pressure on traditional lending margins.

Goldman Sachs and Morgan Stanley, which report Thursday, will provide the clearest window into dealmaking trends. Goldman is expected to show strong M&A advisory fees, though the bank is unlikely to sustain the more volatile gains from equity investments that boosted 2024 results.

Wells Fargo analyst Mike Mayo has noted that "big banks will outperform again in 2026," but the first question is whether Q4 results support that thesis. The earnings reports will reveal whether the deal pipeline remains robust or if activity decelerated into year-end.

What to Watch Beyond the Headlines

Beyond the obvious metrics, several key themes will thread through the week's reports:

Credit Quality: With consumer debt at record levels, investors will scrutinize charge-offs and delinquency trends. Early signs of stress could signal broader economic concerns.

Net Interest Income: After the Fed's three rate cuts in 2025, banks must recalibrate expectations for their lending margins. How much pressure are lower rates putting on NII guidance for 2026?

Capital Markets Activity: Beyond M&A, how strong is the IPO pipeline? Banks with visibility into 2026's potential mega-offerings from SpaceX, Anthropic, and others could provide valuable color.

Expense Management: JPMorgan's $105 billion expense guidance for 2026 has already drawn scrutiny. How are other banks balancing investment in technology and talent against cost discipline?

The Fed Factor

Hanging over everything is the Federal Reserve. With rate cut expectations rapidly evolving, Tuesday's CPI and Thursday's commentary from Fed officials will shape market expectations for the January meeting.

Currently, roughly 95% of futures market participants expect no change in rates at the January meeting. The more interesting question is what happens after that—bond futures show 45% odds of a cut by April and another cut priced in for September.

Bank executives' commentary on their rate expectations could move markets as much as the earnings themselves. If Jamie Dimon signals concern about stubborn inflation or economic headwinds, investors will listen.

The Week's Wild Cards

Beyond the scheduled events, several wild cards could inject volatility:

• Supreme Court Tariff Ruling: The Court is expected to rule on January 14 regarding President Trump's authority to impose tariffs under IEEPA. The decision could affect $200 billion in trade policy.
• China Data: Chinese trade data releases this week will provide insight into global demand and the health of America's most important trading relationship.
• Oil Prices: Crude markets have turned bullish after months of weakness. Continued strength could complicate the inflation narrative.

The Bottom Line

The week of January 12-16 represents the first major stress test for 2026's bull market thesis. If CPI comes in cool, banks beat estimates, and M&A commentary stays positive, the rally likely continues. If any of these pillars crack, markets could recalibrate quickly.

For investors, the week offers a rare opportunity to gather intelligence on multiple fronts simultaneously. The message from Tuesday through Friday will shape not just January's trading but potentially the entire first quarter's trajectory.

Clear your calendar. This week matters.