Stocks Fall as Mideast Heats Up

JPMorgan Chase drops 6.5% despite profit report
By Newser Editors and Wire Services
Posted Apr 12, 2024 3:50 PM CDT
Stocks Fall as Mideast Heats Up
Pedestrians approach JPMorgan Chase headquarters in December in New York.   (AP Photo/Peter Morgan, File)

US stocks tumbled Friday following a mixed start to earnings reporting season. Worries about potentially escalating tensions in the Middle East rattled financial markets, pushing investors to look for safer places for their money, per the AP.

  • The S&P 500 fell 75.65 points, or 1.5%, to 5,123.41, making this its worst week since October.
  • The Dow fell 475.84 points, or 1.2%, to 37,983.24.
  • The Nasdaq composite fell 267.10 points, or 1.6% from its record Thursday, to 16,175.09.

JPMorgan Chase was one of the heaviest weights on the market and sank 6.5% despite reporting stronger profit for the first three months of the year than analysts expected. The nation's largest bank gave a forecast for a key source of income this year that fell below Wall Street's estimate, calling for only modest growth. The pressure is always on companies to produce fatter profits, but it's particularly acute now given worries that the other main lever that sets stock prices, interest rates, may not offer much lift in the near term.

A stream of reports this year has shown both inflation and the overall economy remain hotter than expected. That's forced traders to scale back forecasts for how many times the Federal Reserve may cut its main interest rate this year. Traders are largely betting on just two cuts, according to data from CME Group, down from forecasts for at least six at the start of the year. US stock indexes had already run to records in part on expectations for such cuts. Without easier interest rates, companies will need to produce bigger profits to justify their stock prices, which critics say look too expensive by various measures.

(More stock market stories.)

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