Stocks tumbled Friday as technology companies lost their winning ways, with investors looking for inspiration in results from big banks that kick off earnings season.
The Nasdaq Composite (^IXIC) fell 0.9%, while the S&P 500 (^GSPC) fell 0.7%. The Dow Jones Industrial Average (^DJI) fell 0.6%, or more than 200 points.
Stocks fall after 'Magnificent 7' technology names led higher on Thursday, once again driven by AI winds. Investors were also relieved by the smaller-than-expected gain in wholesale inflation after being spooked by a surprise rise in consumer prices.
Investors are examining quarterly results from major Wall Street banks to assess the potential impact if interest rates remain higher than expected this year.
BlackRock ( BLK ) results kicked off earnings season before the bell on Friday, amid hopes that corporate updates could revive the stock's early-year rally. Shares of the world's largest asset manager pared pre-market gains to trade only in the red, after the company reported a 36% jump in profits.
JPMorgan (JPM) shares fell after its earnings beat targets as CEO Jamie Dimon cited “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) rose above $2,400 to set another new record, and Silver (SI=F) traded at its highest levels since early 2021. Demand is seen as being driven by investors Seeking safety amid escalating tensions in the Middle East. Tensions in the East But avoid US government bonds in the face of inflation fears.
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Oil rises to reach 2024 highs amid escalating tensions in the Middle East
Oil futures rose as much as 3% on Friday amid reports that Israel is preparing for an imminent attack by Iran on government targets as soon as Saturday.
West Texas Intermediate crude futures (CL=F) rose to touch a 2024 intraday high of $87.30 per barrel, while Brent crude futures (BZ=F), the international benchmark, touched a session high of $92.11 per barrel. .
“The escalation in tensions between Israel and Iran also signals to traders that they may get worse before they get better, and there appears to be a lot of options buying as we head into the weekend keeping upward pressure on futures prices.” Dennis Kessler, senior vice president at BOK Financial, wrote in a note to clients on Friday.
Crude oil prices have been on an upward trend this year amid continued production cuts by the OPEC+ oil alliance and tensions resulting from the war between Israel and Hamas. Ukrainian drone attacks against Russian refineries also weighed futures to the upside.
West Texas Intermediate crude oil has risen by more than 21% year to date, while Brent crude oil has risen by about 20% during the same period.
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Jamie Dimon makes a good point to Yahoo Finance about interest rates
Interesting call now with reporters and JPMorgan (JPM) CEO Jamie Dimon and CFO Jeremy Barnum.
The topic was, of course, earnings, but also Dimon's views on interest rates and the economy.
Damon made a good point for me about pricing. (I asked Barnum how the company prepares for “higher for longer” interest rates):
“I just want to point out that rising interest rates in and of themselves are not important. What is important is the reason – is it due to stagflation? That is clearly a negative. Or is it due to healthy growth? That is actually very good.”
Dimon went on to say that he is not “predicting” a recession.
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