LoanDepot shares surge 19.26% as speculation over Trump credit card rate cap sparks sector rotation

LoanDepot shares surged 19.2623% in pre-market trading on Jan. 12, 2026, as speculation over potential regulatory shifts in the credit card industry sparked a broader market reassessment of financial sector exposure.

The rally came amid U.S. President Donald Trump’s proposal to cap credit card interest rates at 10% for one year, announced via Truth Social. While the policy remains unlegislated and analysts note it would require congressional approval, traders reacted swiftly, selling traditional credit card issuers and favoring alternative lending models. This created a relative tailwind for mortgage-focused lenders like LoanDepot, which operates outside the direct scope of the proposed rate restrictions.

Bloomberg Intelligence analysts highlighted that institutions reliant on high-interest credit card revenue—such as Capital One and Synchrony—could face significant margin compression under the plan. Conversely, non-traditional lenders offering "buy now, pay later" services saw pre-market gains, suggesting a sector rotation toward less rate-sensitive business models. LoanDepot’s strong performance underscores market skepticism about the feasibility of Trump’s proposal but reflects a broader reallocation of capital toward financial firms less exposed to interest rate volatility.

Industry observers note that this regulatory speculation mirrors past market responses to potential interest rate caps, though no prior policy of this nature has been successfully legislated in recent years. The current pre-market reaction suggests that investors are factoring in the potential regulatory uncertainty and rebalancing their portfolios accordingly. Market commentators caution that the actual impact will depend heavily on the final legislative outcome and the behavior of credit card users in the event of rate restrictions.