US small-business optimism declined in January from a more than six-year high and a gauge of uncertainty climbed as companies weighed Trump administration policies and the Federal Reserve’s pause on interest-rate cuts.

The National Federation of Independent Business optimism index fell 2.3 points to 102.8 last month. Seven of the 10 index components decreased, led by the steepest monthly decline in capital spending plans since 1995.

The group’s uncertainty indicator jumped 14 points, the most in monthly data back to 1986. The gauge matches the third-highest level on record and suggests companies are growing cautious about investment as the Fed slows the pace of rate cuts and President Donald Trump begins moving forward with tariffs.

That partially reversed a steep drop in the prior two months, as Trump’s election victory gave businesses more clarity on the outlook and subsequently boosted the overall optimism gauge to the highest level since 2018.

The share of small firms expecting easier credit conditions declined for the first time since August, following the Fed’s decision last month to hold rates steady after three reductions at the end of last year.

At the same time, small-business owners remain largely upbeat about the economy’s prospects. A net 47% of small-business owners say they expect the economy to improve in coming months, hovering near a two-decade high after registering negative readings throughout the Biden administration.

Sales expectations eased only slightly from the highest level since the start of 2020, while a smaller share of firms said now is a good time to expand operations.

Meanwhile, the share of firms planning to raise prices has been stuck in the same 10-point range for more than a year, underscoring concerns that progress toward taming inflation is stalling. That will probably be evident in January’s consumer price index due Wednesday.

Findings of the NFIB survey were based on 1,205 responses out of a sample of 10,000 owners — putting the response rate at 12.1%.