Wall Street’s major indexes fell for a second consecutive session as investors digested earnings from large U.S. banks, while fresh data on retail sales and producer prices failed to alter expectations for interest-rate cuts later this year.
Bank stocks were mixed despite largely solid results. Shares of Bank of America dropped 3.5% even after the lender beat quarterly profit forecasts, while Wells Fargo slid 4.4% after missing fourth-quarter revenue estimates. Citigroup eased 0.5% despite reporting higher revenue.
The cautious tone followed comments from executives at JPMorgan Chase, who warned that a proposed cap on credit-card interest rates could pressure consumers and weigh on profitability across the banking sector.
Bank shares have risen roughly 25% over the past year, and the sector fell 0.4% on the day as investors locked in gains. “Banks have had a very strong start to the year, and markets are taking some time to digest the results,” said Jake Johnston, deputy chief investment officer at Advisors Asset Management. He added that modest earnings misses were not unusual given the sharp run-up into results.
Analysts expect companies in the S&P 500 to post average fourth-quarter earnings growth of 8.8% year over year, lifting full-year 2025 profit growth to 13.2%, according to data from LSEG.
By 9:34 a.m. ET, the Dow Jones Industrial Average was down 83.68 points, or 0.17%, at 49,108.31. The S&P 500 slipped 0.43% to 6,933.48, while the Nasdaq Composite fell 0.68% to 23,548.45.
Investors were also watching for rulings from the U.S. Supreme Court, scheduled for release later in the day, with major cases pending, including challenges to global tariffs introduced by President Donald Trump.
Economic data in focus
U.S. producer prices matched expectations in November, while retail sales exceeded forecasts. The data followed a report showing consumer prices in December rose largely in line with projections.
Interest rates are still widely expected to remain unchanged through the first half of the year, including at the Federal Reserve’s January meeting, provided inflation and growth stay on track. Markets are nonetheless pricing in at least two rate cuts before the end of the year, according to LSEG data. Comments from Fed policymakers John Williams, Anna Paulson and Stephen Miran were also due later in the session.
Elsewhere, the market’s record rally showed early signs of broadening, with mid-cap and small-cap stocks outperforming large caps so far this year. The energy sector extended gains for a second day, rising nearly 1% on concerns about supply disruptions in Iran, while consumer discretionary stocks fell about 1%.
Netflix shares edged 0.5% higher after a report said the company was preparing an all-cash bid for the studios and streaming assets of Warner Bros Discovery.
Market breadth was mixed, with advancing stocks narrowly outpacing decliners on the New York Stock Exchange, while decliners slightly outnumbered advancers on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and three new lows, while the Nasdaq Composite posted 28 new highs and 29 new lows.
