🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Stock Market Today: Dow slumps on inflation jitters, disappointing bank earnings

Published 04/12/2024, 06:41 AM
Updated 04/12/2024, 04:35 PM
© Reuters

Investing.com -- The Dow plunged Friday, as major Wall Street banks kicked off the earnings season with disappointing results, stoking worries about the strength of the upcoming earnings season at a time when inflation jitters remain front and center.  

At 16:00 ET (20:00 GMT), the Dow Jones Industrial Average was down 475 points, or 1.2%, S&P 500 fell 1.5% and NASDAQ Composite dropped 1.6%.

Big banks disappoint on earnings stage

JPMorgan Chase (NYSE:JPM) stock fell more than 6% after the banking giant forecast full-year income from interest payments below expectations as the industry prepares for widely expected Federal Reserve rate cuts. 

Wells Fargo (NYSE:WFC) dropped 0.3% despite beating revenue expectations, as the lender reported softer-than-expected net interest income numbers.

Citigroup Inc (NYSE:C), meanwhile, fell more than 2% despite reporting quarterly results that beat on both the top and bottom lines amid signs that turnaround efforts are bearing fruit. 

The health of the banking sector is often be used as a measure of the strength of the  economy as a whole, and uncertainty over the Fed's interest rate outlook is set to hang over the first-quarter earnings season as a whole.

Analysts expect S&P 500 companies in aggregate to report earnings increased 5% in the first quarter from a year earlier, according to LSEG data, a sharp drop from the 10.1% growth seen in the fourth quarter of 2023.

Roku suffers cyberattack; Zoetis arthritis drug under scrutiny 

Elsewhere, Roku (NASDAQ:ROKU) stock fell 3.3% after the streaming service provider said on Friday it has identified a second cyber attack that impacted about 576,000 accounts, after disclosing unauthorized access of 15,000 user accounts earlier this year.

Zoetis Inc (NYSE:ZTS) fell nearly 8% after the Wall Street journal reported that pet owners have filed complaints with regulators alleging that the company's arthritis drugs Librela and Solensia caused side effects in their pets.  

Inflation jitters remain front and center

The Michigan consumer sentiment index fell to 77.9 in April from 79.4 a month earlier, missing forecasts of 79.0 and the data also showed that the 1-year inflation expectations and 5-year expectations rose to 3.1% and 3% respectively, piling on worries about higher for longer interest rates. 

About 27% now expect the Fed to cut rates in June, well below the 51% seen in the prior week, according to Investing.com's Fed Rate Monitor Tool.    

Crude higher on elevated geopolitical risks

Crude prices rose Friday as geopolitical risks, particularly in the oil-rich Middle East, remained elevated, but are set for weekly losses on concerns over U.S. monetary policy. 

U.S. officials have predicted an attack by Iran against Israel shortly, in retaliation for a suspected Israeli air strike against a top Iranian military commander in Damascus earlier this week.

Iran, however, said that it will retaliate in a "calibrated" manner against Israel, signaling the Islamic Republic's intention to avoid sparking a wider war in the Middle East tensions. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.