Stocks stumbled on Friday as techs lost their winning ways, with investors looking for inspiration in the big bank results rolling in to kick off earnings season.
The tech-heavy Nasdaq Composite (^IXIC) slid 0.9%, while the S&P 500 (^GSPC) shed 0.7%. The Dow Jones Industrial Average (^DJI) fell 0.6%, or more than 200 points.
Stocks are falling after “Magnificent 7” tech names led a run higher on Thursday, propelled again by AI tailwinds. Investors also took comfort from a lower-than-expected gain in wholesale inflation after getting spooked by a surprisingly hot consumer price print.
Investors are scrutinizing quarterly results from Wall Street’s big banks to assess the potential impact if interest rates remain higher than expected this year.
BlackRock (BLK) results got earnings season underway before the bell on Friday, amid hopes that corporate updates can revive the early-year rally in stocks. Shares of the world’s biggest asset manager pared premarket gains to trade just in the red, after the company posted a 36% jump in profit.
JPMorgan’s (JPM) shares fell after its profit beat targets as CEO Jamie Dimon flagged “inflationary pressures” and Federal Reserve policy as concerns. Wells Fargo (WFC) and Citigroup (C) traded in the green after their reports.
Meanwhile, precious metals continued to shine: Gold (GC=F) rallied above $2,400 to hit another fresh record, and silver (SI=F) traded at its highest since early 2021. Demand is seen as driven by investors seeking safety amid heightening Middle East tensions but shunning US government bonds in the face of inflation concerns.
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Oil surges to touch 2024 high amid escalating Middle East tensions
Oil futures surged as much as 3% on Friday on reports that Israel is preparing for an imminent attack by Iran on government targets as soon as Saturday.
West Texas Intermediate (CL=F) futures rose to touch an intraday 2024 high of $87.30 per barrel, while Brent futures (BZ=F), the international benchmark price, touched a session high above $92.11 per barrel.
“The escalation of tensions between Israel and Iran is also indicating to traders it may worsen before it gets better, and there seems to be a lot of option call buying as we go into the weekend which is keeping an upward pressure on futures prices,” Dennis Kissler, senior vice president at BOK Financial, wrote in a note to clients on Friday.
Crude prices have been on an upward trend this year amid continued output cuts by oil alliance OPEC+ and tensions stemming from the Israel-Hamas war. Ukrainian drone attacks against Russian refineries have also impacted futures to the upside.
WTI is up more than 21% year to-date, while Brent has gained roughly 20% during the same period.
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Jamie Dimon makes a good point to Yahoo Finance on interest rates
Fun call just now with reporters and JPMorgan (JPM) CEO Jamie Dimon and CFO Jeremy Barnum.
The topic, of course, was earnings but also Dimon’s views on rates and the economy.
Dimon made a good point to me on rates. (I had asked Barnum about how the firm is preparing for “higher for longer” interest rates):
“I just want to point out that rates being higher on their own isn’t that important. What is important is why — is it because of stagflation? That’s obviously a negative. Or is it because of healthy growth? That’s actually pretty good.”
Dimon went on to say he is not “predicting” a recession.
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