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US stocks fall as JP Morgan announces weak earnings, warning | Associated Press

New York (AP) — Thursday afternoon trading on Wall Street caused stock prices to fall sharply, making banks the heaviest weight on the market following sluggish earnings and warnings from JP Morgan Chase.

The S & P 500 fell 1.1% at 1:27 pm in the east. About 90% of benchmark index companies were in the red. The Dow Jones Industrial Average fell 353 points (1.2%) to 30,419, while the Nasdaq fell 0.8%.

Banks suffered some of the biggest losses and had a huge impact on the market. JPMorgan Chase After reporting a significant decline in earnings in the last quarter, it fell 4%, below expectations. CEO Jamie Dimon stuck to a warning earlier this summer that a “hurricane” was heading for the economy.

“I haven’t changed my perspective at all. The negative thing I pointed out, the future risks are still the same risks. It’s closer than before,” he said in a conference call with journalists.

With inflation The Federal Reserve’s battle against it It continues to be an important concern on Wall Street. Wholesale-level inflation rose 11.3% in June Compared to a year ago. Following the report presented on Wednesday, it’s the latest painful reminder that inflation is hot. Consumer-level prices were 9.1% higher last month From a year ago.

Widespread inflation has put pressure on businesses and consumers for months. More importantly for Wall Street, it prompted a positive reversal of the Fed’s interest rate policy. Central banks are currently raising interest rates to slow economic growth and cool inflation, raising concerns that it could go too far and actually cause a recession.

Another fall in oil prices, which indicates investors are expecting slowing economic growth, weighed heavily on energy companies. US oil prices fell 1.3% and ExxonMobil fell 3.6%.

Another sign that investors are worried about economic growth is that small-cap stocks have fallen more than in wider markets. Russell 2000 decreased by 2%.

Affecting 10-year Treasury yield Mortgage ratesIt rose from 2.90% in the second half of Thursday to 2.96%. It remains below the Treasury’s 3.10% for two years. This is a relatively rare event and some investors see it as an ominous sign of a potential recession.

The Federal Reserve has already raised interest rates three times this year, and traders are increasingly hoping for a full percentage point monster interest rate hike at the next meeting of the central bank two weeks later. According to CME Group, traders are betting on an 83% chance of a full point rise, up from zero a month ago.

Christopher Waller, a member of the Federal Reserve Board, said on Thursday Open to support such movements If future economic data shows strong consumer spending.

“We felt this week that the Fed would make a significant move enough to give greater control in the fight against inflation,” said Greg Basque, CEO of AXS Investments. It’s a soft landing, but the windows are shrinking. “

Investors are becoming more and more concerned as retail sales and other data indicate an economy that is already slowing. It can make it more difficult for the Fed to make so-called “soft landings.” There, it raises inflation cool enough without causing a recession.

Concerns over the Federal Reserve’s rate hike have led Bank of America to anticipate a mild recession that will hurt the economy in the second half of this year and more pain for traders. According to banks, the benchmark S & P 500 index has already fallen into a bear market, down 20% from its most recent January high and may not have bottomed out yet.

Investors will have a clearer outlook in the coming weeks on how serious inflation is hitting businesses. There are several more banks that report revenue on Friday, such as Citigroup, Wells Fargo, and UnitedHealth Group, an insurance company.

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US stocks fall as JP Morgan announces weak earnings, warning | Associated Press

Source link US stocks fall as JP Morgan announces weak earnings, warning | Associated Press

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