US stocks suffered a sharp decline on Friday as major banks’ earnings reports failed to meet expectations. This capped off a volatile week dominated by concerns about inflation, shifting Federal Reserve policy stances, and escalating geopolitical tensions, according to Reuters.
All three major indexes plunged by over 1 per cent, extending losses into the week. The S&P 500 experienced its worst weekly percentage drop since January, while the Dow Jones recorded its steepest weekly decline since March 2023.
“Recent inflation data has worsened, putting pressure on companies to deliver strong earnings this season,” explained Mike Dickson, research head at Horizon Investments. “Investor anxiety is high, with intense focus on exceeding earnings expectations.”
The unofficially-kicked-off first-quarter earnings season saw disappointing results from major banks. JPMorgan Chase, the largest US bank by assets, reported a 6 per cent profit rise but missed analyst expectations for net interest income. Its shares consequently took a 6.5 per cent tumble.
Wells Fargo’s stock dipped slightly after a 7 per cent profit decline due to weak loan demand impacting net interest income. Citigroup, meanwhile, posted a loss due to employee severance and deposit insurance expenses, with its stock price falling by 1.7 per cent.
