U.S. Stocks Retreat as Financial Sector Weighs Ahead of Key Earnings Reports
On Tuesday, U.S. stocks gave up their early gains to trade lower, with the financial sector weighing down the market ahead of key earnings reports later in the week. Market participants also exhibited caution as they awaited the latest consumer inflation data set to be released.
Wall Street’s three major averages opened in the green but quickly reversed course. The tech-heavy Nasdaq Composite was down 0.06% to 16,244.62 points, the S&P 500 was lower by 0.25% to 5,189.32 points, and the Dow fell 0.35% to 38,757.18 points.
Of the 11 S&P sectors, six were in the red, with financials falling the most. Investors are eagerly awaiting quarterly numbers from heavyweight names such as JPMorgan, Wells Fargo, and Citi later in the week.
Wednesday’s consumer price index (CPI) report will be closely watched by investors for further clues on the future of monetary policy. Concerns over sticky inflation have weighed on sentiment in recent months, with stronger-than-expected cues on the labor market leading traders to dial back their expectations for interest rate cuts.
Small business optimism hit its lowest levels since December 2012 in March, with inflation once again being reported as the top business problem on Main Street. Price pressures and finding quality labor were cited as the primary issues facing small businesses.
In the fixed-income markets, Treasury yields were lower, with a $58 billion 3-year note auction that tailed by 4 basis points. Active stocks included Moderna, which was the top percentage gainer on the S&P 500 after releasing positive data from a study on its investigational candidate for head and neck cancer treatment. Boeing slipped after revealing a 55% year-over-year fall in March aircraft deliveries, while Norfolk Southern gained after reaching a $600 million settlement over a freight train derailment.
