Wall Street’s main indexes fell on Tuesday after mixed earnings from Morgan Stanley and Goldman Sachs pressured banks, while declines in Boeing and Apple also weighed.
Morgan Stanley(MS.N), opens new tab fell 3.5% to a more than one-month low after posting a decline in quarterly profit, while Goldman Sachs(GS.N), opens new tab reported a 51% rise in profit, sending its shares up 1.6%.
Other lenders such as Wells Fargo (WFC.N), opens new tab, Bank of America (BAC.N), opens new tab, Citigroup (C.N), opens new tab and JPMorgan Chase (JPM.N), opens new tab were also down between 0.9% and 1.9%. Most had reported lower profits on Friday.
The broader banks index (.SPXBK), opens new tab slid to an over one-month low on Tuesday.
Among others, Apple (AAPL.O), opens new tab dropped 1.6%, after offering rare discounts on its iPhones in China owing to competition pressures, days after being overtaken by Microsoft (MSFT.O), opens new tab as the world’s most valuable firm.
Also dampening sentiment were remarks by Fed Governor Christopher Waller, who said that while he was more confident of inflation being on track to the 2% target, there should be no rush to cut rates.
Traders pared their expectations for the Federal Reserve starting rate cuts in March after the comments, with U.S. Treasury yields also rising.
“Central banks across the world are starting to push back against bets of more aggressive interest rate cuts,” said Nick Zamparelli, chief investment officer at Sequoia Financial Group.
Wall Street finished the previous week higher as investors continued to pin their hopes on an early start to the Fed’s monetary-policy-easing cycle - despite a lack of supporting voices among policymakers and mixed inflation data.
“What you’re hearing from a lot of these policymakers is... it’s a little bit too early to declare victory against inflation and that is clearly a headwind to risky assets that are pricing in a much more accommodative monetary policy stance,” Zamparelli said.
UBS Global Research boosted its 2024 year-end target for the S&P 500 (.SPX), opens new tab on Tuesday to 5,150 points, representing an over 8% upside from current levels.
Even after briefly surpassing its previous record closing high last week, the benchmark index has faced resistance to breaching its highest intra-day level, hit in January 2022.
At 11:58 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab was down 210.48 points, or 0.56%, at 37,382.50, the S&P 500 (.SPX), opens new tab was down 16.27 points, or 0.34%, at 4,767.56, and the Nasdaq Composite (.IXIC), opens new tab was down 36.87 points, or 0.25%, at 14,935.89.
Nvidia (NVDA.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab jumped 3.1% and 7.9%, respectively, as investor optimism over the prospects of higher demand for artificial intelligence-powered chips prompted Wall Street analysts to hike their price targets for the semiconductor giants.
Dow Jones dropped to a one-week low, after Boeing (BA.N), opens new tab slumped 7.7% to a two-month low, as the Federal Aviation Administration extended the grounding of its 737 MAX 9 airplanes indefinitely and brokerage Wells Fargo downgraded the stock to “equal weight” from “overweight”.
Applied Digital(APLD.O), opens new tab slumped 23.0% after the data-center services provider posted downbeat second-quarter revenue.
Declining issues outnumbered advancers for a 3.27-to-1 ratio on the NYSE and for a 2.53-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and two new lows, while the Nasdaq recorded 48 new highs and 128 new lows.