Major Indexes Rise; Dow Sets Fresh Record; Treasury Yields Fall After Delayed Retail Sales Data Comes in Below Expectations

How a Hidden Twist Could Keep Trump Account Savings Tax-Free Forever

FROM 30 minutes ago

The Trump Accounts created under the One Big Beautiful Bill Act (OBBBA) are government-funded investment accounts designed to help children build wealth from birth. Babies born between Jan. 1, 2025, and Dec. 31, 2028, will automatically receive a one-time $1,000 deposit from the government.

For parents of children born in that window, opening a Trump Account is a no-brainer. The government sets up the account and provides the seed money, and then the funds can compound over decades into a modest nest egg—all at no cost to the family.

But Trump Accounts aren’t just for newborns. Families with children up to age 18 can open one and contribute up to $5,000 per year. That’s where the hidden twist comes in: At age 18, the account converts to a traditional IRA, which can then be converted to a Roth IRA—creating a powerful opportunity to build tax-free wealth no matter the initial age of the Trump Account owner.

That matters because traditional and Roth IRAs are taxed very differently. Traditional IRAs are funded with pretax dollars and taxed when money is withdrawn. Roth IRAs flip the formula: Taxes are due upfront, but qualified withdrawals later on are tax-free.

For many young adults, it’s an unusually good moment to make that switch. Earnings are often low enough to fall into the 0% federal income tax bracket, which means converting a traditional IRA to a Roth IRA could trigger little or no tax at all.

Read the full article here.

–Sabrina Karl

You Can Split Your Rent With ‘Buy Now, Pay Later’ Plans—But It Will Cost You

FROM 1 hr 25 min ago

Need some flexibility with your monthly rent payment? There are now options to spread your rent payments out over the month. But using a rent-now, pay-later service comes with some costs, which can balloon if renters have trouble repaying the loan.

Affirm, one of the biggest Buy Now, Pay Later (BNPL) providers, has launched a pilot program with rent reporting firm Esusu that lets people split their rent payment into two installments. There are several other firms providing similar rent now, pay later services.

However, finance charges can quickly add up on these plans, as with other BNPL options.

While the Affirm plan advertises that it doesn’t charge interest, it’s not free to use. Consumers don’t access the service directly through Affirm: Instead, it’s offered through a partnership with Esusu, a company that lets users count their rent payments toward their credit scores.

Read the full article here.

–Terry Lane

Here’s How Much McDonald’s Stock Is Expected to Move After Earnings Wednesday

FROM 2 hr 13 min ago

McDonald’s is set to release its fourth-quarter earnings on Wednesday morning, with traders anticipating the fast food giant’s stock could reach new highs following the results.

Current options pricing suggests traders expect McDonald’s (MCD) stock could move up to 3% in either direction by the end of the week. A move of that size from Monday’s close near $326 would lift the stock close to $336, exceeding Friday’s record. At the low end, the stock could slip to $315.

McDonald’s has climbed recently amid a broader rotation out of tech stocks and into more consumer-focused stocks amid some caution about the AI trade. The fast food leader’s stock has added about 6% since the start of the year.

UBS analysts wrote ahead of the report that they expect solid sales growth in the U.S. and internationally in the fourth quarter, along with updates about strong first-quarter sales as consumers reward the chain’s focus on value and efforts with win customers over with deals.

Read the full article here.

–Aaron McDade

What to Expect From Wednesday’s Report on the Job Market

FROM 2 hr 44 min ago

You could get a job anywhere you wanted in January, as long as you wanted to work in health care.

That’s the upshot of what forecasters expect a report Wednesday from the Bureau of Labor Statistics to show. U.S. employers likely added 55,000 jobs that month, up from 50,000 in December, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

As in recent months, job gains are expected to be concentrated in health care, with careers in other fields becoming harder to find as employers remain in a no-hiring mindset. The unemployment rate is forecast to remain at 4.4%, a relatively low level by historical standards.

The data will shed light on the job market as the economy’s trajectory remains uncertain. Officials at the Federal Reserve are increasingly concerned about a possible surge in unemployment. Among the recent red flags about the job market: employers had fewer openings in December than at any time since 2020. Economists look at job openings as a leading indicator of future job growth.

Read the full article here.

–Diccon Hyatt

Stock Futures Little Changed After Dow Closes at Record

FROM 3 hr 18 min ago

Futures contracts connected to the Dow Jones Industrial Average were 0.1% higher.

S&P 500 futures pointed up 0.1%.

Nasdaq 100 futures were fractionally higher.