Stock Market Today: Big Bank Earnings Fail to Lift Stocks
The major indexes closed lower Friday on hawkish Fed speak and dismal retail sales data.
Stocks started the day modestly higher after several big banks, including JPMorgan Chase (JPM) and Citigroup (C), kicked off first-quarter earnings season on a high note. However, the major indexes quickly turned lower after one Fed official suggested the central bank has more work to do to bring down inflation.
The selling pressure continued throughout the session, though all three main benchmarks managed to hang on to weekly gains.
JPMorgan and Citigroup were among a handful of big banks that reported Q1 earnings this morning. The financial sector, while always important, is even more so right now following last month's failure of several regional banks.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But the turmoil didn't seem to impact JPM, which saw first-quarter earnings surge 56% year-over-year to $4.10 per share and revenue jump 25% to a record $38.4 billion. Net interest income – a key metric for banks that measures what they make on loans minus what they pay depositors – was up 49%. Citigroup, for its part, reported steady top- and bottom-line growth for the quarter as higher interest rates fueled an 18% year-over-year jump in personal banking revenue. JPM stock spiked 7.5% today, while C added 4.8%.
"Big banks are largely immune to the issues that drove Silicon Valley Bank and Signature Bank into the columbarium of failed financial institutions," says José Torres, senior economist at Interactive Brokers. "Unlike regional banks [which appear on next week's earnings calendar], the money centers have low costs of funds, especially with the recent failures of smaller banks causing investors to flock to the safety of the biggest financial companies."
Wall Street's positive mood quickly soured after Federal Reserve Governor Christopher Waller said during a speech in San Antonio, Texas, that the central bank must keep raising rates because of stubbornly high inflation and a tight labor market.
Still, signs continue to show that the Fed's efforts to rein in inflation by slowing the economy are indeed working. The Commerce Department earlier said retail sales in March slumped 1% month-over-month, the biggest decline since November, due largely to falling gas prices and auto sales.
Also on the economic front, preliminary data from the University of Michigan showed that while consumer sentiment is up from March (to 63.5 from 62.0), near-term inflation expectations are also on the rise (to 4.6% from 3.6% last month). Longer term inflation expectations remain steady, though.
At the close, the Nasdaq Composite was down 0.4% at 12,123, the S&P 500 was off 0.2% at 4,137, and the Dow Jones Industrial Average was 0.4% lower at 33,886.
Earnings, Tax Day on deck
With the Fed meeting still a couple weeks out and a relatively light economic calendar on tap, all eyes will be on corporate earnings next week. But there's another important event investors should be aware of: Tax Day. While the official deadline to file taxes is Tuesday, April 18, some folks, including taxpayers impacted by severe storms, have extra time. If you need a tax extension, make sure to check out Kiplinger's guidance on how to get more time to file your federal tax return.
Investors will also want to review this year's capital gains tax rates, which apply to profits made from the sale of stocks, mutual funds and other assets. If you're looking for ways to reduce investment taxes, these five strategies could help.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
Stock Market Today: Markets Rebound Ahead of Big Week for Earnings
Equities rallied on easing geopolitical tensions, upcoming quarterly results.
By Dan Burrows Published
-
Stock Market Today: Nasdaq Spirals as Netflix Nosedives
A big earnings boom for credit card giant American Express helped the Dow notch another win.
By Karee Venema Published
-
Stock Market Today: S&P 500, Nasdaq Extend Losing Streaks
The two indexes have closed lower for five straight sessions.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Stock Market Today: Stocks Stabilize After Powell's Rate-Cut Warning
The main indexes temporarily tumbled after Fed Chair Powell said interest rates could stay higher for longer.
By Karee Venema Published
-
Stock Market Today: Stocks Reverse Lower as Treasury Yields Spike
A good-news-is-bad-news retail sales report lowered rate-cut expectations and caused government bond yields to surge.
By Karee Venema Last updated
-
Stock Market Today: Nasdaq Leads as Magnificent 7 Stocks Rise
Strength in several mega-cap tech and communication services stocks kept the main indexes higher Thursday.
By Karee Venema Published
-
Stock Market Today: Stocks Tumble After a Hot Inflation Print
Equities retreated after inflation data called the Fed's rate-cut plans into question.
By Dan Burrows Published