Stocks Slip From Records as Inflation Data Fails to Shift Fed Outlook – US Market Wrap
US equities retreated as fresh inflation data did little to change expectations that the Federal Reserve will remain on hold, while weakness in bank shares added pressure after JPMorgan Chase’s earnings disappointed. Bonds traded unevenly and the dollar strengthened.
Signs that price pressures are gradually easing initially reassured investors, but momentum faded as the session wore on. The S&P 500 pulled back from a record high, weighed down by a sharp drop in JPMorgan shares after investment-banking revenue fell short of guidance, with declines in both underwriting and merger-advisory activity.
A softer-than-expected increase in core consumer prices was not enough to sustain gains in Treasuries. Despite three rate cuts since September, money markets continue to price the next potential Fed reduction only around mid-2026.
Looking ahead, attention is turning to the remainder of the US banking earnings season. Results from Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley are due over the next two days. The sector is expected to deliver its second-highest annual profit on record, supported in part by recent policy shifts under President Donald Trump.
Markets are also watching for a potential US Supreme Court ruling on tariffs implemented this year. While those levies have modestly reduced borrowing needs, an unfavorable decision could weigh on sentiment, even as the administration retains alternative legal paths to maintain most of the measures.
By the close, the S&P 500 was trading near 6,965. The yield on 10-year Treasuries was little changed at 4.17%. The dollar gained 0.2%, while oil prices climbed after an escalation in US rhetoric toward Iran.
