Wall Street indexes fall, led by tech and bank shares

U.S. stocks fell on Wednesday, ‌led ​by a more than 1% drop ‌in the Nasdaq with technology shares declining as investors moved into more defensive ​areas, while bank stocks extended recent losses following some mixed quarterly results.

The S&P 500 bank index dropped 2.1% to ‍hit a five-week low, with shares ​of Wells Fargo down 5.1% after the company missed fourth-quarter profit expectations.

Citigroup shares were down 4.1% and ​Bank of ⁠America fell 4.2% even after the companies beat Wall Street estimates for fourth-quarter profit.

Financials including the banks, which were up sharply in 2025, have fallen this week amid concerns over U.S. President Donald Trump’s proposed cap on credit-card interest rates which JPMorgan executives warned could squeeze consumers and hurt financial sector profits.

“After ‌a nice run, and so-so or mediocre earnings, you’re seeing profit-taking and consolidation,” in the banks, ​said ‌Michael O’Rourke, chief market strategist ‍at JonesTrading in ⁠Stamford, Connecticut. “Generally speaking, people are still optimistic on the group.”

In tech, he said, investors are looking to rotate out of expensive megacaps and into value and more defensive names. In addition, the president has gone after a number of industries, “putting Main Street over Wall Street.”

The S&P 500 technology sector led declines among sectors, however, while more defensive groups including consumer staples rose.

The Dow Jones Industrial Average fell 142.31 points, or 0.29%, to 49,049.87, the S&P 500 ​lost 54.24 points, or 0.78%, to 6,909.48 and the Nasdaq Composite lost 320.57 points, or 1.35%, to 23,389.89.

Shares of Broadcom, Palo Alto Networks and Fortinet fell after a Reuters report said Chinese authorities have told domestic companies to stop using cybersecurity software made by roughly a dozen U.S. and Israeli firms.

Data earlier on Wednesday showed producer prices in the U.S. matched forecasts in November, but retail sales topped expectations, following data a day earlier showing December consumer prices rose as projected.

Interest rates are widely expected to hold steady through the first half of the year, including at the Fed’s January meeting, with traders pricing in at least two ​cuts before year-end, according to LSEG data.

Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the NYSE. There were 430 new highs and 55 new lows on the NYSE.On the Nasdaq, 2,509 stocks rose and 2,173 fell as advancing issues outnumbered decliners by a 1.15-to-1 ratio.

Wall Street’s largest banks witnessed ‌healthy ​growth last year from their prime brokerage units, ‌as they earned handsome fees from lending to the world’s largest multi-strategy hedge funds which navigated volatility in ​financial markets to produce robust returns.

Earlier on Wednesday, Bank of America reported a 23% jump in revenues during the fourth quarter from its equities business, which houses the lender’s ‍prime brokerage unit, while Citigroup’s revenue from ​equities markets came in at $1.1 billion, with prime balances up more than 50% for the bank. Prime balances refer to the assets that banks typically manage for ​their fund clients.

“We continue ⁠growing in prime, where you’ve seen very high growth from us - the second leg to our derivative capability, as well as high return opportunities and financing and securitization that’s now over 70% of our spread product business,” Citi Chief Executive Jane Fraser said on a post-earnings conference call with analysts.