Stocks were sluggish on Friday as tech companies lost their winning streak and looked to big banks' results for inspiration as earnings season gets underway.
The tech-heavy Nasdaq Composite Index (^IXIC) fell 0.9%, and the S&P 500 (^GSPC) fell 0.7%. The Dow Jones Industrial Average (^DJI) fell 0.6%, or more than 200 points.
After leading the rally on Thursday with the Magnificent 7 technology stocks, stocks are once again falling, driven by AI tailwinds. Investors were also relieved that wholesale inflation growth was weaker than expected, after being spooked by an unexpected jump in consumer prices.
Investors are scrutinizing the quarterly results of Wall Street's biggest banks to assess the potential impact if interest rates are higher than expected this year.
BlackRock's (BLK) results kicked off earnings season before the bell on Friday, raising hopes that the company's latest information will revive the stock's gains from the start of the year. Shares in the world's largest asset manager traded in the red after the company posted a 36% profit increase, netting pre-market gains.
JPMorgan (JPM) stock falls after profits beat target as CEO Jamie Dimon cited “inflationary pressures” and Federal Reserve policy as concerns did. Wells Fargo (WFC) and Citigroup (C) rose following the report.
Meanwhile, precious metals continued to perform well, with gold (GC=F) setting a new record above $2,400 and silver (SI=F) trading at its highest since early 2021. Despite tensions in the East, they are avoiding U.S. Treasuries in the face of inflation concerns.
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Oil prices soar as tensions in the Middle East intensify, reaching peak price in 2024
Oil futures rose as much as 3% on Friday after reports that Israel was preparing for an imminent attack by Iran on government targets as soon as Saturday.
West Texas Intermediate (CL=F) futures rose above $87 per barrel, and the international standard price of Brent crude oil (BZ=F) hit a trading high of over $92 per barrel.
“Escalating tensions between Israel and Iran are signaling to traders that the situation could get worse before it gets better, with heavy option call buying heading into the weekend, putting upward pressure on futures prices,” Dennis said. It seems like this is continuing.” BOK Financial Senior Vice President Kistler said in a note to clients on Friday.
Oil prices have been on an upward trend this year due to continued production cuts by the oil alliance OPEC+ and tensions stemming from the Israel-Hamas war. A Ukrainian drone attack on a Russian refinery has also weighed on futures gains.
WTI is up more than 21% since the beginning of the year, while Brent is up about 20% over the same period.
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Jamie Dimon makes a point about interest rates to Yahoo Finance
A fun call between reporters and JPMorgan (JPM) CEO Jamie Dimon and CFO Jeremy Burnham.
The topic of discussion was, of course, profits, but Dimon's views on interest rates and the economy were also a hot topic.
Mr. Dimon gave me a good point regarding pricing. (I asked Burnham about how the company is preparing for a “prolonged period of high interest rates.”)
“I just want to point out that it's not so important that interest rates are high in and of itself. What matters is why – is it because of stagflation? That's obviously negative. Or is it because of healthy growth? Is it actually because of stagflation? That's pretty good.''
Dimon went on to say that he is not “predicting” a recession.
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