S&P 500 and Dow fell. After a Thursday 2.5% drop, the Nasdaq saw gains and losses.
The Dow fell more than 1% after the Dow’s earnings report. JPMorgan Chase (JPM), shares dropped more than 5% following lower-than-expected fourth quarter trading revenues and higher compensation expenses. Based on Bloomberg data, the stock decline was JPMorgan’s worst since 2011. Citigroup (C), shares also dropped after posting a similar miss in fixed-income trading revenues and equities trading revenue for the quarter.
Peer bank Wells Fargo (WFC), shares rose after posting quarterly revenues that exceeded estimates, as both consumer and commercial loans increased at the end last year.
Friday’s economic data was weaker than expected, which added to market risk. U.S. retail sales dropped 1.9% month-on-month in December, exceeding estimates of 0.1% dip. This is the largest drop since February 2021. The November sales figures were also revised downwardly to reflect a 0.2% increase in monthly sales, as opposed to the 0.3% rise previously reported.
Investors have been trying to weigh the concerns of price pressures in the U.S. against statements from central bank officials, which claim that the Federal Reserve is prepared to reduce inflation.
Thursday’s hearing by Fed Governor Lael brainard before the Senate Banking Committee suggested that the central bank could raise interest rates, which would tighten financial conditions as well as help lower inflation. “As soon asset purchases cease,” she said. The Federal Reserve plans to stop its asset-purchase tapering in March.
