Stocks on Wall Street took a hit on Friday due to concerns about inflation and geopolitical tensions, causing a sell-off that weighed on investor sentiment. The Dow Jones Industrial Average fell by 475.84 points, closing at 37,983.24, while the S&P 500 and Nasdaq Composite also experienced declines of 1.46% and 1.62% respectively. At one point during the trading session, the Dow was down by nearly 582 points. For the week, the broader market index dropped by 1.56%, with the Dow falling by 2.37% and the Nasdaq slipping by 0.45%.
Despite the recent declines, the overall market performance for the year has been positive, with the Dow up 0.7%, the S&P 500 up 8%, and the Nasdaq up 9.5% since the beginning of the year. JPMorgan Chase shares declined over 6% following the release of its first-quarter results, where it reported that net interest income may fall short of expectations in 2024. CEO Jamie Dimon also warned about inflationary pressures impacting the economy. Other major bank shares, such as Wells Fargo and Citigroup, also saw declines after reporting their latest quarterly figures.
Oil prices continued to rise amid reports that Israel was preparing for a potential attack by Iran over the weekend, contributing to concerns about escalating tensions in the region. U.S. crude settled at $85.66 per barrel after rising above $87. This, along with new U.S. imports data, added to worries about inflation that have been affecting the market. Investors have been taking a cautious approach heading into the weekend due to a flight to safety trade, with a stronger dollar and sell-offs in equities.
Consumer sentiment regarding inflationary pressures has also been affected, with the consumer sentiment index for April coming in below expectations at 77.9. Year-ahead and long-run inflation expectations have increased, reflecting frustrations over persistent inflation. As a result, investors are adjusting their expectations around the Federal Reserve’s actions based on the latest economic data. The combination of inflation concerns and geopolitical tensions has led to a risk-off sentiment in the market.
Overall, the market’s performance has been impacted by inflation worries and geopolitical tensions, leading to a sell-off in stocks on Wall Street. Despite positive year-to-date gains, recent declines have raised concerns among investors about the economy’s hot streak and the sticky nature of inflation. The uncertain landscape surrounding inflation expectations and geopolitical tensions in the Middle East have contributed to a cautious approach among investors, as they monitor the latest economic data and adjust their expectations accordingly.
