Stocks Fall as Big Banks Disappoint on Earnings
Wall Street Worries Grow Amid Disappointing Results
U.S. stocks took a hit on Friday as major Wall Street banks started the earnings season with less-than-stellar results, raising concerns about the upcoming earnings season amidst ongoing inflation fears.
The Dow Jones Industrial Average was down 523 points, or 1.4%, while the S&P 500 traded 79 points, or 1.5%, lower, and the Nasdaq dropped 1.7% by 14:06 ET (18:06 GMT).
Banking Giants Struggle Despite Efforts
JPMorgan Chase stock plummeted over 5% after predicting lower-than-expected full-year income from interest payments in anticipation of Federal Reserve rate cuts.
Wells Fargo also saw a 0.4% decline despite surpassing revenue expectations, with softer net interest income figures. Similarly, Citi’s stock fell over 2% despite beating quarterly results estimates.
The banking sector’s performance is closely watched as a barometer for the overall economy, and uncertainties surrounding the Fed’s interest rate trajectory loom over the first-quarter earnings season.
Roku Faces Cyberattack, Zoetis Drug Under Scrutiny
Roku shares dropped 2.8% after disclosing a second cyberattack affecting around 576,000 accounts, following a previous breach earlier this year.
Zoetis Inc shares fell nearly 8% following reports of pet owners filing complaints against the company’s arthritis drugs, Librela and Solensia, for adverse effects on their pets.
Inflation Concerns Persist
The Consumer Sentiment Index dropped to 77.9 in April, missing forecasts, with inflation expectations rising to 3.1% and 4%, fueling worries about prolonged high-interest rates.
Amid escalating inflation concerns, investors await insights from Fed speakers to gauge the central bank’s future interest rate plans.
Crude Prices Rise Amid Geopolitical Risks
Crude oil prices climbed on Friday due to heightened geopolitical tensions, particularly in the Middle East, despite weekly losses driven by apprehensions surrounding U.S. monetary policy.
Speculations of an imminent Iranian retaliation against Israel and Iran’s pledge for a measured response indicate efforts to avoid escalating tensions in the region.
