FX.co ★ U.S. Stocks Close Sharply Lower On Bank Earnings, Inflation Concerns

U.S. stocks took a significant hit on Friday due to mounting geopolitical tensions, inflation concerns and mixed earnings reports from major banks. Consequently, all major indexes finished in the red. The Dow closed at 37,983.24, with a loss of 475.84 points or 1.24 percent. The S&P 500 fell by 75.65 points or 1.46 percent, closing at 5,123.41. Meanwhile, the Nasdaq ended at 16,175.09, experiencing a loss of 267.10 points or 1.62 percent.

During the week, the Dow dropped around 2.5 percent, while the S&P 500 and Nasdaq decreased by roughly 1.6 percent and 0.5 percent respectively. Citigroup shares fell 1.7 percent after the bank reported a 27 percent decrease in net income in Q1, reaching only $3.4 billion due to decreased non-interest revenue and increased costs.

Meanwhile, JPMorgan Chase & Co. saw its shares dip by nearly 6.5 percent, despite a six percent increase in its Q1 profit, bringing its net income to $13.42 billion or $4.44 per share. Wells Fargo reported a Q1 net income of $4.62 billion, representing a fall from last year's $4.99 billion.

Other major companies like Broadcom, Airbnb, Dollar Tree, Sirius XM, Micron Technology, AMD, Intel, ON Semiconductor, Cisco, Salesforce, Microsoft, Boeing, Amazon, 3M, Caterpillar, and Goldman Sachs also sustained significant losses. However, Dayforce, Apple, Globe Life, Equinix, and Kimco Realty saw reasonable gains.

Inflation concerns continued to suppress the market after a Labor Department report showed that U.S. import prices rose by 0.4 percent in March, more than the predicted 0.3 percent. This marks the first year-on-year increase since January 2023. Export prices also grew by 0.3 percent in March, with an annual decrease of 1.4 percent.

A report from the University of Michigan indicating a larger than expected decrease in consumer sentiment in April weighed on the market as well. The report also disclosed a rise in year-ahead inflation expectations from 2.9 percent in March to 3.1 percent in April.

Internationally, most of Asia's stock markets experienced downturns on Friday. Hong Kong’s Hang Seng Index experienced a 2.2 percent drop and China's Shanghai Composite Index fell by 0.5 percent. However, Japan's Nikkei 225 index exhibited a slight increase of 0.2 percent. Europe presented a mixed picture with the pan-European Stoxx 600 making a marginal gain of 0.14 percent. The UK’s FTSE 100 climbed 0.91 percent while Germany’s DAX and France's CAC 40 fell slightly. In the bond market, the yield on the ten-year note dropped to 4.523 percent.