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Luke Kawa

Credit card and bank stocks stumble after President Trump calls for 10% interest rate cap

Shares of banks and US financial services companies are under pressure on Monday morning after President Donald Trump declared his intention to impose a hard limit on how much money they can make off credit cards.

In a Truth Social post on Friday evening, Trump announced that he would be calling for a one-year cap of 10% on credit card interest rates. Over the weekend, the president said that card issuers with a rate above that as of January 20 would be “in violation of the law.”

As of this point, these statements do not appear to carry the force of law.

“While the president has announced his support for a cap, this cannot be done through an executive order,” wrote George Pollack, senior US policy analyst at Signum Global Advisors. “Instead, this would require an act of Congress.”

Nevertheless, traders are selling first and asking logistical questions later. Credit card giants Visa and Mastercard are lower in premarket trading, as are other financial services companies with a significant footprint in this space. The news is also casting a pall over this week’s bank earnings, with JPMorgan, Citi, Bank of America, and Wells Fargo all well in the red.

“President Donald Trump’s call for a 10%, one-year cap on credit card interest rates, if enacted, would severely hurt the revenue and profit of Capital One, Synchrony Financial and Bread Financial, with a smaller impact on American Express,” Bloomberg Intelligence consumer finance analysts Ben Elliott and Edward Najarian wrote. “The companies would likely react by raising fees and rapidly reducing credit availability, especially for below-prime customers.”

Financial services companies that offer “buy now, pay later” options, such as Affirm and Klarna, are rising in premarket trading. If Trump’s proposal is realized, this may result in a pullback in credit provided to lower-income and less creditworthy Americans, and BNPL firms could see a resultant uptick in activity. Klarna, for its part, applauded the president’s call in a post on X.

Independent (left-leaning) Senator Bernie Sanders as well Republican Senator Josh Hawley have introduced a bill that would cap credit card rates at 10% for five years, while Democrat Representative Alexandria Ocasio-Cortez and Republican Representative Anna Paulina Luna have introduced similar legislation in the House.

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SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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