On Friday, stocks decreased following a series of earnings surprises from major banks, raising worries that the Federal Reserve could increase interest rates in its upcoming two meetings.
Nevertheless, the key indices appreciated over the week. The Dow climbed 400 points, translating to a 1.2% rise. The S&P 500 improved by 0.8%, while the Nasdaq Composite increased by 0.3%.
JPMorgan Chase announced on Friday a first-quarter profit and revenue that exceeded projections, thanks to the Fed’s rate hike strategy. Citigroup, Wells Fargo, and PNC Financial also showcased impressive outcomes.
CEO Jamie Dimon cautioned investors during the company’s earnings conference call that they must get ready for interest rates to remain elevated for longer than anticipated.
Wall Street appears to be paying attention. Analysts have raised their expectations for a quarter-point interest rate hike during the Fed’s meeting in May, with another increase anticipated in June.
Federal Reserve Governor Christopher Waller stated on Friday that the central bank must persist in tightening monetary policy, which exerted additional pressure on the markets.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, remarked that it is “definitely” feasible for the United States to experience a mild recession following the recent turmoil in banking.
In the meantime, retail sales figures fell more than anticipated, indicating that American consumers’ purchasing power and the US economy may be weakening.
Consumer sentiment remained relatively stable in April, despite lingering worries about a recession, as per the latest monthly survey from the University of Michigan.
“There was an overload of news to process this morning, but the main takeaway is that the Fed has the capacity to inflict more damage,” stated Edward Moya, senior market analyst at OANDA, in a note.
The Dow decreased by 144 points, or 0.4%.
The S&P 500 dipped by 0.2%.
The Nasdaq Composite fell by 0.4%.
As stocks finalize the trading session, figures may still fluctuate slightly.
