On Friday, US stocks experienced a significant downturn as earnings reports from major banks failed to meet expectations, marking the culmination of a tumultuous week dominated by inflationary worries, shifting Federal Reserve policy signals, and escalating geopolitical tensions, as reported by Reuters.
All three primary indexes plummeted by more than 1 percent, extending losses throughout the week. The S&P 500 registered its most substantial weekly decline since January, while the Dow Jones witnessed its sharpest weekly drop since March 2023.
Mike Dickson, research head at Horizon Investments, elucidated, “Recent inflation data has exacerbated concerns, placing heightened pressure on companies to deliver robust earnings this season. Investor apprehension is palpable, with a keen emphasis on surpassing earnings forecasts.”
The commencement of the unofficial first-quarter earnings season saw major banks delivering disappointing results. Despite reporting a 6 percent profit increase, JPMorgan Chase, the largest US bank by assets, fell short of analyst expectations for net interest income, resulting in a 6.5 percent decline in its shares.
Similarly, Wells Fargo’s stock saw a marginal decline following a 7 percent profit downturn attributed to weak loan demand impacting net interest income. Citigroup posted a loss due to expenses related to employee severance and deposit insurance, leading to a 1.7 percent drop in its stock price.
