Wall Street stocks retreated from records on Tuesday as markets weighed muted US inflation data, mixed bank earnings and a jump in oil prices.

The US consumer price index rose 2.7 percent last month, the same rate as in November and in line with expectations.

While the inflation report keeps alive the prospect of interest rate cuts by the Federal Reserve in 2026, US equities tripped into negative territory as Tuesday's session progressed.

All three major indices finished in the red, led by the Dow, which was weighed down by a more than four percent drop in JPMorgan Chase shares.

Both the Dow and S&P 500 had finished at records on Monday.

JPMorgan Chief Executive Jamie Dimon described the US economy as "resilient" but investment banking results lagged behind expectations and some analysts questioned the lender's heavy capital spending plans.

Shares of other banks and credit card companies have also been pressured by President Donald Trump's call last week to cap credit card interest at 10 percent – one of several recent Trump statements that have caught markets off guard.

"Trump said a lot of stuff" and the market is quite lost where to look at, said Pat Donlon of Fiduciary Trust Company.

"It's like around Liberation Day," Donlon said, recalling Trump's April 2025 announcement of sweeping tariffs that sparked market volatility. "We get these wild swings and are back living on Truth Social posts."

The price of oil surged around three percent as Trump announced steep tariffs on anyone trading with Iran, sparking expectations that the threat will restrict supplies of crude.

"Supply concerns remained front and centre after President Trump announced new tariffs on US imports from any countries trading with Iran, raising fears of further disruptions from one of Opec's largest producers," said David Morrison, senior market analyst at Trade Nation, a financial services provider.

"Iran's domestic unrest, alongside escalating rhetoric around potential military action, added to the geopolitical premium," he said.

The S&P 500 fell 0.2 percent, to 6,963. The Dow fell 0.8 percent, to 49,191, while the Nasdaq fell 0.1 percent, to 23,709. (AFP)