US stock indices fell on Thursday after weaker-than-expected earnings from major banks JPMorgan and Morgan Stanley underscored growing fears of a sharp economic downturn.
At midday, the Dow Jones Industrial Average lost 1.46% to 30,323.68 units, the S&P 500 fell 15% to 3,746 points and the Nasdaq Composite fell 0.97%% to 11,039 units.
The benchmark S&P 500 index is headed for its fifth straight session of losses amid fears that the Federal Reserve’s aggressive moves to rein in price rises could push the world’s largest economy into recession.
JPMorgan shares fell 4.7% to $106.7, their lowest level since November 2020, after it reported a larger-than-expected 28% drop in quarterly profit and suspended share buybacks to set aside more money. to cover possible losses.
Jamie Dimon, chief executive of the largest US bank, pointed to a number of concerns including geopolitical tension, high inflation and “never seen” quantitative tightening as threats to global economic growth.
Shares of Morgan Stanley fell 1.4% after the bank missed earnings estimates for the first time in nine quarters as its investment banking unit struggled to cope with a slump in global business.
The broader S&P 500 index of banks fell 1.5% to its lowest level since December 2020.
After last week’s strong jobs report cemented the case for a 75 basis point rate hike in July, investors were rattled by Wednesday’s consumer price data, which pushed traders to bet on a one percentage point hike in interest rates this month.
June inflation in the United States soared to 9.1%, a figure not seen since November 1981. In addition, a report from the Labor Department showed that US producer prices also increased more than expected in June, due to the rise in the costs of energy products, but core inflation for producers seems to have peaked.
With information from Reuters.
