Stocks fell Friday as inflation fears infected investor sentiment following remarks from the head of JPMorgan. The Dow Jones Industrial Average dropped 475 points, while the S&P 500 Index and Nasdaq Composite lost 1.5% and 1.6%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index (NYSE: SPY): -1.46% or -75.65 points to 5,123.41
Dow Jones Industrial Average (NYSE: DIA): -1.24% or -475.84 points to 37,983.24
Nasdaq Composite Index (NASDAQ: QQQ): -1.62% or -267.10 points to 16,175.09
Moving Markets:
JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon warned on Friday that the U.S. economy is faces multiple headwinds, including inflation and the geopolitical landscape, that threaten its future health and growth.
The leader of the largest U.S. bank by assets said that while "many economic indicators continue to be favorable," the economy exists in an "unsettling" global landscape that includes wars, persistent inflationary pressures, alongside the Federal Reserve's efforts to lower the assets its holding on its $7.5 billion balance sheet; "We have never truly experienced the full effect of quantitative tightening on this scale," Dimon said in announcing the bank's first-quarter earnings results.
"We do not know how these factors will play out, but we must prepare the Firm for a wide range of potential environments to ensure that we can consistently be there for clients," Dimon added.
On the Earnings Front:
JPMorgan Chase posted better-than-expected first-quarter earnings Friday morning, driven by strong trading revenues. Looking ahead for 2024, JPM expects net interest income of roughly $90 billion, reiterating its previous forecast and disappointing investors that expected the bank to raise its guidance by $2 billion to $3 billion.
BlackRock (NYSE: BLK) also delivered better-than-expected first-quarter earnings on Friday, with the company's assets under management slightly topping expectations at $10.473 trillion. "I see the greatest opportunities I've ever seen for BlackRock, for our clients, and for our shareholders," CEO Larry Fink said during the company's earnings call with analysts.
Citigroup (NYSE: C) also reported strong first-quarter earnings on Friday, driven by better-than-expected results for its investment banking and trading segments. "Last month marked the end to the organizational simplification we announced in September," CEO Jane Fraser in the company's earnings release. "The result is a cleaner, simpler management structure that fully aligns to and facilitates our strategy."
Wells Fargo (NYSE: WFC) also topped estimates for its first-quarter despite the bank posting a decline in net interest income. A key measure for what a bank earnings on lending, WFC saw net interest income falling 8% during the quarter, driven by higher interest rates and a consumer shift to higher-yielding deposit offering.
"Our solid first quarter results demonstrate the progress we continue to make to improve and diversify our financial performance," CEO Charlie Scharf said in a statement. "The investments we are making across the franchise contributed to higher revenue versus the fourth quarter as an increase in noninterest income more than offset an expected decline in net interest income."
In Economic News:
The University of Michigan's consumer sentiment index came in at 77.9 for April, coming in slightly below estimates as consumers grew more concerned over one-year and longer-term inflation outlooks.
"A slight uptick in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled. Overall, consumers are reserving judgement about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy," said Joanne Hsu, director of the Surveys of Consumers, in a statement.
Looking Ahead:
Market participants are gearing up for a busy week of economic news and earnings reports next week, including March's retail sales and housing market data as well as remarks from Fed Chair Jerome Powell.
The week's earnings reports include Goldman Sachs (NYSE: GS), Charles Schwab (NYSE: SCHW), United Health (NYSE: UNH), Bank of America (NYSE: BAC), Johnson & Johnson (NYSE: JNJ), Morgan Stanley (NYSE: MS) and Procter & Gamble (NYSE: PG).