By Yasin Ebrahim
Investing.com -- The Dow slipped Wednesday, pressured by banks on fresh worries about a slowing economy, while an intraday bounce in technology stocks ran out of steam.
The Dow Jones Industrial Average slipped 0.5%, or 176 points, the Nasdaq fell 0.7%, and the S&P 500 fell 0.8%.
Financials, mostly banks, were the biggest drag on the broader market as remarks on the economy from JPMorgan CEO Jamie Dimon stoked fresh concerns about a slowdown.
After previously describing the risks to the economy as “storm clouds,” Dimon painted a gloomier picture of the economy, and warned investors to brace for an economic "hurricane."
JPMorgan Chase & Co (NYSE:JPM) fell nearly 2%, but regional banks including SVB Financial (NASDAQ:SIVB) and State Street (NYSE:STT) led the losses, with both down more than 3% even as Treasury yields continued to gather momentum.
The United States 10-Year Treasury yield made a dash for 3% as the Federal Reserve kicked off its plan Wednesday to reduce its nearly $9 trillion balance sheet.
Tech stocks ended the day mixed after giving up some gains, pressured by rising Treasury yields and a dip in Meta Platforms Inc (NASDAQ:FB).
The social media giant said Wednesday that Sheryl Sandberg was stepping down as chief operating officer. Javier Olivan, Chief Growth Officer will replace Sandberg as COO in the fall.
Salesforce (NYSE:CRM) reported upbeat guidance and better-than-expected quarterly results, sending its shares about 10% higher.
“Our greatest takeaway from F1Q is management's unwavering commitment to margin and FCF growth, which we see as essential for the stock to continue working from here,” Deutsche Bank said, though it cut its price target on the stock to $260 to $300.
The gloomy outlook on the economy arrived just as data showed that manufacturing activity picked up pace in May, but job openings fell.
The May ISM Manufacturing PMI rose to a reading of 56.1 from 55.4 in April, confounding expectations for a decline to 54.5.
Job openings fell by 450,000 in April, but economists were quick to downplay the prospect of easing pressures in the labor market.
“JOLTS data do not point to any slowdown in the pace of hiring. Taking the difference between gross hires and total separations (quits + layoffs + retirements) suggests that employment rose by 553k in April, about 100k higher than the reported payroll gain,” Jefferies said in a note.
In other news, Delta Air Lines Inc (NYSE:DAL) forecast sales in the current quarter to return to pre-pandemic levels, buoyed by pent-up travel demand that is likely to remain resilient despite higher airfares. Its shares fell 5%.