Inflation continued to hold investors back from pouring more money into the stock market Friday. JPMorgan Chase and other major banks beat Wall Street’s earnings expectations, but their stocks dropped anyway. Geopolitical tensions in the Middle East fueled higher oil prices. And higher oil prices could fuel further inflation — making it still more difficult for the Federal Reserve to cut interest rates.
The Dow Jones Industrial Average had dropped 312 points, or 0.8%, to 38,146 near midday. The S&P 500 was down 1% and the Nasdaq pulled back 1.1%.
U.S. Treasury yields decreased as investors’ confidence in the economy waned. The yield on the 10-year Treasury was down more than eight basis points at 4.489%.
That said, at least one Fed leader is still hoping for lower interest rates this year. Federal Reserve Bank of Boston President Susan Collins is anticipating at least two cuts in 2024.
“I am still expecting that we’re going to see some slowing in demand start and continue into 2024, and that will help to bring inflation down later in the year,” Collins told Reuters.
Stocks dip on disappointing big bank earnings
JPMorgan Chase stock fell more than 5% following the bank’s first-quarter earnings.
The banking giant reported $41.9 billion revenues in the first quarter of 2024, up 9% from the same period last year and topping analysts’ projected $41.674 billion. JPMorgan also posted earnings per share (EPS) of $4.44, surpassing the $4.17 expected by analysts, according to estimates compiled by FactSet. In the first quarter of 2023, the bank saw earnings of $4.10 per share.
JPMorgan CEO Jamie Dimon warned people to expect the unexpected in the economy. “We don’t really know what’s going to happen,” Dimon said in a call with analysts Friday.
Citigroup and Wells Fargo all beat Wall Street expectations when they reported quarterly earnings Friday morning.
But all three banks’ stocks were down near midday.
Globe Life stock takes a wild ride on insurance fraud allegations
Shares of Globe Life, one of Texas’ largest insurance providers, dropped more than 50%, following a short position taken by Fuzzy Panda Research that alleged potential fraud at the company. Globe Life denied the allegations, and the stock recovered some of its losses Friday morning.
Globe Life stock traded at $96 per share on Thursday morning. It fell sharply to $41 by the late afternoon. It was hovering around $49 per share early Friday morning, down 53% over the course of a day. And the stock was back to about $57 by mid-morning, up 15% on the day but still down down 40% over the course of about 24 hours.
The stock collapse initially wiped out $5 billion in market cap, The Wall Street Journal reports.
Oil prices continue to rise
Israel is preparing for an imminent attack from Iran, The Wall Street Journal reports. That has sent oil prices higher.
The benchmark Brent crude futures price has risen to $91.86 a barrel, while the West Texas Intermediate gained 2.73% to $87.34 a barrel.
–Rocio Fabbro contributed to this article.