Trump Proposes Credit Card Rate Cap, Financial Stocks Dip
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Rate Cap Proposal: Trump proposed a 10% cap on credit card interest rates effective January 20, causing concern in the market and leading to stock declines of 4.5% for Bank of America and 6.6% for JPMorgan Chase.
- Market Reaction: Following the announcement, major credit card issuers saw significant stock drops, with American Express and Capital One falling by 6.8% and 9.9% respectively, indicating investor anxiety over future profitability.
- Industry Resistance: The financial sector has strongly opposed this proposal, as similar rate cap initiatives have failed in the past; analysts predict this proposal is unlikely to pass Congress, which may lead to short-term volatility in financial stocks.
- Future Outlook: Despite current pressures, the financial industry is expected to benefit in 2026 from ongoing monetary easing by the Federal Reserve, with a steepening yield curve enhancing bank profitability, suggesting that now may be an opportune time to invest in financial stocks.
Analyst Views on AXP
Wall Street analysts forecast AXP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AXP is 351.42 USD with a low forecast of 280.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
7 Buy
12 Hold
2 Sell
Hold
Current: 357.370
Low
280.00
Averages
351.42
High
400.00
Current: 357.370
Low
280.00
Averages
351.42
High
400.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
