Stocks sold off Friday as inflation and geopolitical concerns once again soured investor sentiment on Wall Street. A sharp drop in major bank stocks also weighed on the market.
The Dow Jones Industrial Average fell 475.84 points, or 1.24%, to close at $37,983.24. The S&P 500 fell 1.46% to 5,123.41. The Nasdaq Composite fell 1.62% to 16,175.09.
At one point in the trading session, the Dow Jones Industrial Average was down nearly 582 points, or 1.51%. The S&P 500 fell 1.75%.
For the week to date, the market composite index has fallen 1.56%, and the Dow 30 has fallen 2.37%. Meanwhile, the tech-heavy Nasdaq fell 0.45% for the week.
The market has generally been in good shape so far this year. The Dow Jones Industrial Average is up 0.7% since the beginning of the year. The S&P 500 and Nasdaq are up 8% and 9.5%, respectively, since the beginning of 2024.
JPMorgan Chase shares fell more than 6% after the banking giant reported first-quarter results. The bank said its net interest income, a key measure of income earned through lending activities, may fall slightly short of what Wall Street analysts expect in 2024. CEO Jamie Dimon also warned that persistent inflationary pressures were weighing on the economy.
Wells Fargo, which released its latest quarterly data, fell 0.4%. Citigroup fell 1.7% despite outperforming sales.
Oil prices continued to rise following reports that Israel is preparing for a direct attack by Iran this weekend. The attack would be the biggest escalation of regional tensions since the Israeli-Hamas war broke out last October. U.S. crude oil rose above $87 before settling at $85.66 per barrel.
This, combined with new U.S. import figures, added to inflation concerns weighing on the market.
“Sentiment is becoming more risk-off heading into the weekend. We’re seeing a flight to safety with the dollar strong, and stocks are selling,” said Rob Howarth, senior investment strategist at U.S. Bank Wealth Management. he said.
“This follows inflation data showing that the economy is still pretty hot and inflation is sticky. [investors] To actually adjust their expectations of the Fed. … That’s part of the reason they’re being cautious heading into the weekend,” Howarth said.
Consumers are also becoming increasingly concerned about persistent inflationary pressures. Consumer confidence in April was 77.9, lower than the Dow Jones consensus estimate of 79.9, according to the University of Michigan Consumer Survey. Inflation expectations for next year and the longer term also rose, reflecting dissatisfaction with persistently high inflation.
