The Dow Jones Industrial Average took a nosedive on Friday as major Wall Street banks kicked off the earnings season with disappointing results, sparking concerns about the upcoming earnings season and inflation worries. At 16:00 ET, the Dow was down 475 points, the S&P 500 fell 1.5%, and the Nasdaq dropped 1.6%.
Big banks such as JPMorgan Chase, Wells Fargo, and Citigroup all reported mixed results, with JPMorgan Chase’s stock falling over 6% after forecasting lower-than-expected full-year income from interest payments. Wells Fargo saw a slight drop despite beating revenue expectations, while Citigroup fell over 2% despite reporting positive quarterly results.
The health of the banking sector is often seen as a barometer for the overall economy, and uncertainty over the Federal Reserve’s interest rate outlook is expected to loom over the first-quarter earnings season. Analysts are predicting a 5% increase in S&P 500 company earnings for the first quarter, a significant drop from the 10.1% growth seen in the previous quarter.
In other news, streaming service provider Roku’s stock fell 3.3% after disclosing a cyberattack that affected approximately 576,000 accounts. Zoetis Inc, a pharmaceutical company, also saw a nearly 8% drop after reports of complaints from pet owners regarding side effects of their arthritis drugs.
Meanwhile, inflation concerns remain at the forefront, with the Consumer Sentiment Index falling in April and inflation expectations rising. Geopolitical tensions in the Middle East have also contributed to a rise in crude oil prices, with concerns over potential attacks by Iran against Israel leading to elevated risks in the region.
Overall, the market is facing a mix of challenges, from disappointing earnings reports to inflation worries and geopolitical tensions, making for a volatile and uncertain trading environment.
