U.S. Stocks Close Sharply Lower On Bank Earnings, Inflation Concerns

U.S. stocks closed sharply lower on Friday, as geopolitical tensions, inflation worries and mixed earnings and guidance from major banks rendered the mood a bit bearish.

The major averages all ended in the red. The Dow ended with a loss of 475.84 points or 1.24 percent at 37,983.24. The S&P 500 drifted down 75.65 points or 1.46 percent to 5,123.41, while the Nasdaq settled at 16,175.09 with a loss of 267.10 points or 1.62 percent.

The Dow shed nearly 2.5 percent in the week, while the S&P 500 and the Nasdaq dropped by about 1.6 percent and 0.5 percent, respectively.

Shares of Citigroup fell by about 1.7 percent, after reporting a 27 percent drop in net income at $3.4 billion in the first quarter, due to lower non-interest revenue, as well as higher expenses and cost of credit.

JPMorgan Chase & Co. tumbled nearly 6.5 percent, weighed down by lower net interest income. The lender reported a 6 percent increase in first quarter profit. For the first quarter, net income increased to $13.42 billion or $4.44 per share from $12.62 billion or $4.10 per share in the prior-year quarter.

Wells Fargo Inc (WFC) reported first-quarter net income of $4.62 billion or $1.20 per share, down from last year's $4.99 billion or $1.23 per share. The stock ended modestly lower.

Broadcom, Airbnb, Dollar Tree, Sirius XM, Micron Technology Micron Technology, AMD, Intel and ON Semiconductor lost ended sharply lower. Cisco, Salesforce, Microsoft, Boeing, Amazon, 3M, Caterpillar and Goldman Sachs also posted sharp losses.

Dayforece, Apple, Globe Life, Equinix and Kimco Realty closed with sharp to moderate gains.

Inflation concerns continued to weigh on the markets, as the Labor Department released a report showing import prices in the U.S. increased by slightly more than expected in the month of March.

The report said import prices climbed by 0.4 percent in March after rising by 0.3 percent in February. Economists had expected import prices to increase by another 0.3 percent.

Import prices also rose by 0.4 percent compared to the same month a year ago, marking the first year-over-year increase since January 2023.

Meanwhile, the Labor Department said export prices rose by 0.3 percent in March after climbing by a revised 0.7 percent in February. The increase in export prices matched economist estimates.

Compared to the same month a year ago, export prices were down by 1.4 percent in March following a 1.8 percent slump in February.

A report showing a bigger than expected drop in consumer sentiment in April weighed as well. The University of Michigan said its consumer sentiment fell to 77.9 in April from 79.4 in March. Economists had expected the index to edge down to 79.0.

The report also said year-ahead inflation expectations rose to 3.1 percent in April from 2.9 percent in March, climbing just above the 2.3-3.0 percent range seen in the two years prior to the pandemic.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. Hong Kong's Hang Seng Index plunged by 2.2 percent and China's Shanghai Composite Index fell by 0.5 percent, although Japan's Nikkei 225 Index bucked the downtrend and crept up by 0.2 percent.

Meanwhile, the major European markets ended mixed. The pan European Stoxx 600 ended up by 0.14 percent. The U.K.'s FTSE 100 climbed 0.91 percent, while Germany's DAX and France's CAC 40 ended lower by 0.13 percent and 0.16 percent, respectively.

In the bond market, treasuries moved back to the upside after ending the previous session slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped down to 4.523 percent.

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