Stocks finished lower Friday as inflation worries rattled markets and investors looked to the start of the first-quarter earnings season.
The Dow Jones Industrial Average lost 475.84 points, or 1.24%, to 37,983.24, while the S&P 500 fell 75.65 points, or 1.46% to 5,123.41 and the tech-heavy Nasdaq sank 267.10 points, or 1.62%, to 16,175.09.
Week to date, the broad market index dropped 1.56%, and the 30-stock Dow fell 2.37%. Meanwhile, the tech-heavy Nasdaq is 0.45% lower for the week, CNBC reported.
Consumer sentiment ebbed in April while inflation expectations for the next 12 months and beyond increased, according to survey released on Friday..
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 77.9 this month, compared to a final reading of 79.4 in March.
“Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy,” Surveys of Consumers Director Joanne Hsu said in a statement.
Jeffrey Roach, chief economist for LPL Financial, said more consumers believe their household finances are worse off from a year ago, “but that may be more perception than reality.”
"If true, deteriorating household finances will definitely impact spending, shifting consumers more into a defensive posture,” he said. “Investors should give careful attention to the upcoming earnings reports from luxury retailers for a fresh perspective on the health of the consumer.”
Updated at 1:04 PM EDT
Deeper declines
Stocks are moving deeper into the red over the final hours of a tough trading week, with the S&P 500 now down 76 points, or 1.47% on the session, with bank stocks leading the overall drawdown.
The Dow, meanwhile, is down 470 points while the Nasdaq was last marked 267 points, or 1.63% lower, and near the session trough.
If Joe Six Pack is hoping for the opposite of what he saw yesterday (Mag 7 up, rest of the market largely lower), he's not gonna like what he sees today. With three hours until the closing bell, we current have 95% of all stocks in the S&P 500 trading lower. $SPX $SPY $MAGS $NVDA https://t.co/UffdYMn0n6 pic.twitter.com/ugq6MrszrP
— Brandon Van Zee (@BrandonVanZee) April 12, 2024
Updated at 12:02 PM EDT
Shine on you crazy bullion ...
Goldman Sachs analysts boosted their 2024 gold price forecasts Friday, calling for the bullion to rise to as high as $2,700 per ounce by the end of the year.
"Gold's relative stability in the aftermath of this week's stronger than expected US CPI print was yet another demonstration that the metal's bull market is not being driven by the usual macro suspects" with pricing rising as a result of emerging market central bank purchases as well as surging retail appetite.
Spot gold prices were last marked 0.88% higher on the session at $2,393.40 per ounce extending its 2024 gain to around 16.1%
Goldman raises gold price target to $2700 from $2300#GOLD https://t.co/cY1hycoiie pic.twitter.com/E2sc5xC5jC
— macrokit (@macrokit1) April 12, 2024
Updated at 10:58 AM EDT
Tesla on deck
Tesla (TSLA) shares extended declines Friday following a pair of price target changes to the EV maker ahead of its first quarter earnings report later this month in what is likely to be the market's next major test as it focuses on Mag 7 profits into the first half of the year.
Tesla shares were marked 1.8% lower in early Friday trading and changing hands at $171.79, a move that extends its second-quarter decline to around 1.8%.
Related: Analysts overhaul Tesla price targets as Q1 earnings loom
Updated at 9:57 AM EDT
Can't take it to the bank
JPMorgan is leading bank stocks lower, falling just over 4.2%, following a mixed set of first quarter earnings reports from the country's biggest lenders.
The declines are adding downward pressure to the S&P 500, which was marked 31 points, or 0.6% lower in early trading, as well as the Dow, which fell 245 points. Chip stocks, meanwhile, are weighing on the tech-focused Nasdaq, which is down 107 points, or 0.6
"Future earnings are being repriced under the realization that interest rates will be held at current levels likely until late in the year," said Brian Mulberry, a client portfolio manager at Zacks Investment Management.
"This changes some of the prior forecasting that included more robust banking demand from consumers and commercial customers as the cost of capital comes down, and that does not appear to be likely," he added.
S&P 500 Opening Bell Heatmap (Apr. 12, 2024)$SPY -0.55% 🟥$QQQ -0.80% 🟥$DJI -0.50% 🟥$IWM -0.31% 🟥 pic.twitter.com/EWpRtfOk1T
— Wall St Engine (@wallstengine) April 12, 2024
Updated at 9:06 AM EDT
Crude reality
Global oil prices surged to a fresh six-month high in early Friday trading amid concerns over the escalation of military conflicts in the middle east and intelligence reports that Iran is planning to strike Israeli targets in retaliation for its alleged involvement in an attack on Tehran's embassy in Syria.
Brent crude futures contracts for June delivery, the global pricing benchmark, were last seen $1.52 higher at $91.25 per barrel while WTI contracts for June, which are tightly-linked to domestic gas prices, rose $1.78 to $86.80 per barrel.
Brent is at 90. The opec plus cuts have successfully created a deficit compared to usual buildup of stocks that happens at the start of year. Demand is picking up in the 2nd half of the year…this sets the stage well for opec plus to return some of its supply gradually back into… pic.twitter.com/gf8h1QfGpG
— Amena Bakr (@Amena__Bakr) April 12, 2024
Updated at 8:07 AM EDT
Citigroup bump
Citigroup shares jumped higher following a solid first quarter earnings report that included a stronger-than-expected bottom line of $1.58 per share and a $35% surge in investment banking revenues, which hit $903 million.
Citigroup shares were marked 1.6% higher in pre-market trading at $61.70 each following the earnings release.
$C | Citigroup Q1 24 Earnings:
— LiveSquawk (@LiveSquawk) April 12, 2024
- Adj EPS: $1.58 (est $1.23)
- Revenue: $ 21.1B (est $20.39B)
- Total Loans $674.6B (est $688.44B)
- FICC Sales & Trading Rev $4.15B (est $4.12B)
- Investment Banking Rev $903M (est $776.9M)
- Total Cost Of Credit $2.37B (est. $2.64B)
Stock Market Today
Stocks ended higher Thursday as markets clawed back the week's earlier losses following a muted reading for factory-gate inflation, which alongside CPI inflation figures feeds into the Federal Reserve's preferred PCE Price Index.
Traders are still betting that the Fed will unveil its first rate cut later this year, likely in September, but have pared bets on the total number of reductions to just two, down from as many as six in early January, as inflation levels remain firmly above the Fed's 2% target.
Boston Fed President Susan Collins, speaking at an event hosted by the Economic Club of New York, said rate cuts are still part of her baseline projections for this year. But she noted that “recent data suggest it may take more time than I had previously thought to gain greater confidence in inflation’s downward trajectory, before beginning to ease policy.”
Kansas City Fed President Jeffrey Schmid, San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic are slated to speak later in the day.
Benchmark 10-year note yields, which hit an early November high of 4.57% earlier this week, were last marked at 4.538% while 2-year notes were pegged at 4.924%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.51% higher at a five-month high of 105.816.
Bank earnings key
Bank earnings are likely to take center stage in today's trading, with first-quarter updates from three of the country's biggest lenders: JPMorgan, Citigroup (C) and Wells Fargo (WFC) .
JPMorgan (JPM) shares were down 3.5% in early trading after the bank reported stronger-than-expected first-quarter earnings but noted a sequential decline in net interest income and issued a cautious outlook statement from CEO Jamie Dimon.
Related: JP Morgan shares tumble as key Q1 earnings metric disappoints Wall Street
The financials sector is key to this year's first-quarter earnings season and is forecast to contribute around 18% of the S&P 500's $457 billion in profits, second only to the information technology sector.
Heading into the start of the trading day on Wall Street, futures tied to the S&P 500 suggest a 22-point decline while those linked to the Dow Jones Industrial Average are priced for a 116-point opening-bell dip
The tech-focused Nasdaq, meanwhile, is priced for a 100-point opening-bell decline amid a broader slump in chip stocks. That's tied to a Wall Street Journal report that China has ordered its largest telecoms carriers to phase out the use of foreign-made semiconductors.
Intel (INTC) shares were marked 1.94% lower at $36.90 while Advanced Micro Devices (AMD) shares slipped 1.8% to $167.47. Nvidia (NVDA) was also in the red, falling 0.64% to $900.40.
In overseas markets, the regionwide Stoxx 600 was marked 0.95% higher in midday Frankfurt trading following yesterday's dovish policy meeting at the European Central Bank. The ECB teed up the first rate cut in more than a year for later in June.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
Overnight in Asia, the surging U.S. dollar pulled the yen to a record low 153.34, setting up the potential for currency-market intervention over the coming weeks. The Nikkei 225 ended 0.21% lower in Tokyo.
Broader Asia stocks were also in the red, with the MSCI ex-Japan index falling 1.14%, following weaker-than-expected trade data from China. The report showed a surprise slump in both imports and exports for the month of March.
Related: Veteran fund manager picks favorite stocks for 2024
