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American Express shares tumbled significantly in premarket trading on Monday morning, falling 5.03% to $356.75 as of 6:03 AM EST, following President Donald Trump’s Friday evening announcement calling for a 10% cap on credit card interest rates. The proposed one-year cap, which Trump stated would apply starting January 20, sent shockwaves through the financial services sector, with major banks and credit card companies experiencing substantial selloffs.

While the announcement does not currently carry the force of law and would require congressional action to implement, investors responded swiftly by selling financial stocks first and asking questions later about the policy’s feasibility and implementation timeline.
 

Credit Card and Bank Stocks Sell Off on Policy Concerns

The proposed interest rate cap triggered a broad selloff across the financial services sector on Monday morning. American Express fell 4% during premarket hours, while payment processors Visa and Mastercard declined 1.2% and 2% respectively.

Major banks were hit even harder, with JPMorgan Chase and Citigroup dropping 3.2% and 3.6%, while Bank of America and Wells Fargo fell 2.5% and 2.2%. Consumer finance companies bore the brunt of the selloff, with Synchrony Financial, Bread Financial, and Capital One tumbling between 8% and 10%.

Bloomberg Intelligence analysts Ben Elliott and Edward Najarian warned that if enacted, the cap would severely hurt revenue and profit for major credit card issuers, particularly Capital One, Synchrony Financial, and Bread Financial, with a smaller impact on American Express.

The analysts noted that companies would likely react by raising fees and rapidly reducing credit availability, especially for below-prime customers. This could fundamentally reshape the credit landscape and push borrowers toward alternative, potentially more expensive lending options.
 

AXP Stock Performance and Key Market Metrics

Prior to Monday’s premarket decline, American Express closed at $375.61 on January 9, down $4.19 or 1.10% at 4:00 PM EST. The stock had opened that day at $383.00 with a previous close of $379.80, demonstrating volatility even before Trump’s announcement fully impacted trading.

The premarket drop to $356.75 represented an additional decline of $18.88 or 5.03%, bringing the total two-day loss to over 6%. Despite this setback, American Express has demonstrated strong long-term performance with a remarkable 227.67% gain over the past five years, significantly outperforming the S&P 500’s 82.14% return over the same period.

The company maintains a market capitalization of approximately $261.38 billion and trades at a P/E ratio of 25.26. With earnings per share of $14.87 and a forward dividend yield of 0.87%, American Express has built a solid financial foundation. However, analysts remain cautious about the stock’s near-term prospects given the regulatory uncertainty.

The average analyst price target stands at $372.76, though TD Cowen recently raised its target from $350 to $375 while maintaining a Hold rating. As the company prepares to report earnings on January 30, 2026, investors will be closely watching for management commentary on potential regulatory changes and their impact on the business model.

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