Stocks fell on Tuesday as investors grew cautious as the first batch of bank earnings hit the market after a series of announcements from the Trump administration.

The Dow Jones Industrial Average (DIA  ) fell 400 points to end the session at 49,191.99, while the broader market S&P 500 Index (SPY  ) lost about 0.2% to settle at 6,963.74. The tech-heavy Nasdaq Composite (QQQ  ) was also 0.1% lower to close out the day at 23,709.87.

JPMorgan Chase (JPM  ) posted better-than-expected fourth-quarter results on Tuesday, but its investment banking fees came in below estimates and its profit fell by 7% to $13.03 billion. Chief Executive Officer Jamie Dimon noted in his earnings remarks that the U.S. economy has remained resilient.

"While labor markets have softened, conditions do not appear to be worsening ... consumers continue to spend, and businesses generally remain healthy," Dimon said. "These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of deregulation and the [Federal Reserve's] recent monetary policy."

"However, as usual, we remain vigilant, and markets seem to under-appreciate the potential hazards -- including from complex geopolitical conditions, the risk of sticky inflation and elevated asset prices," he added.

Delta Air Lines (DAL  ) also reported positive fourth-quarter earnings on Tuesday, leading CEO Ed Bastian to forecast a more than 20% potential earnings upside from 2025 this year as travel demand continues to surge, especially amongst higher-income spenders.

"Effectively, none of our growth in seats will be in the main cabin; virtually all will be in the premium sector," Bastian told reporters during the company's earnings call, referring to the "K-shaped" economic recovery post pandemic.

That recovery pattern, where wealthier Americans are earning more and lower-income Americans are dipping into their savings to stay afloat, is not expected to last long-term, according to Stifel.

"Amid economic optimism we take an opposing view, believing that the 'K-shaped' economy (stocks up, only the wealthy spend more) is economically unsustainable," wrote Barry Bannister, chief equity strategist at Stifel, in a Tuesday note. "As aggregate labor income (payrolls x hours x real wages) falls in 2026 (our forecast), we expect real personal consumption (~70% of GDP) to slow."

President Donald Trump in recent weeks has announced a series of efforts to support lower income Americans, including measures to cap credit card interest rates at 10%, banning institutional investors from purchasing single-family homes, and calling on the federal government to purchase $200 billion in mortgage bonds. Trump added to these initiatives late Monday, stating that Microsoft (MSFT  ) will announce changes that will ensure utility costs will not increase as a result of the tech giant's growing domestic datacenter infrastructure.

Also making headlines on Tuesday, December's consumer price index (CPI) reading showed headline inflation rising 0.3% month-to-month and 2.7% annually. Core CPI, which excludes food and energy prices, also came in below Wall Street expectations, rising 0.2% on the month and 2.6% year-over-year.

Elsewhere, Bank of America Securities raised its price target on Alphabet (GOOG  ) (GOOGL  ) to $370 from $335, implying a 11.5% upside from Monday's close, as the firm praised the company's new Gemini AI partnerships with Apple (AAPL  ) and Walmart (WMT  ).

"We think the Apple and Walmart deals warrant a higher multiple given increased evidence of traction for google's Gemini capabilities, and potential for AI-Driven monetization upside," analyst Justin Post said in a Tuesday note to clients.