United States stock markets closed mixed on Tuesday (Wednesday AEST), as inflation figures and a round of earnings from major financial institutions weighed on investor sentiment.
While the Dow Jones Industrial Average fell sharply, the Nasdaq Composite ended the day at a fresh record high, buoyed by strong gains in NVIDIA.
The Dow fell 436.36 points, or 1%, to close at 44,023.3, while the broader S&P 500 slipped 24.8 points, or 0.4%, to finish at 6,243.8. The Nasdaq Composite rose 37.5 points, or 0.2%, to end at a record 20,677.8, helped by a 4% surge in Nvidia.
NVIDIA advanced after the chipmaker said it hopes to resume deliveries of its H20 GPU to China soon, lifting broader technology sentiment and offsetting some of the macroeconomic concerns that hit other sectors.
Investors absorbed June inflation data released during the session, which showed headline CPI rising 0.3% on the month, in line with expectations and pushing the annual rate to 2.7%.
However, the increase from May levels reignited fears that inflationary pressures may persist. Core CPI, which strips out food and energy, rose a milder 0.2% on the month and 2.9% year over year, also matching forecasts.
The data stoked worries about the potential inflationary impact of further protectionist measures. President Donald Trump announced over the weekend that the U.S. would impose a 30% tariff on goods imported from the European Union and Mexico starting 1 August, heightening concerns among investors about future price pressures and supply chain disruptions.
Earnings updates from some of the country’s largest financial institutions failed to reassure markets.
Wells Fargo reported earnings ahead of consensus, but a reduction in its net interest income guidance led to a sell-off, with shares down 5.5%.
JPMorgan Chase also delivered better-than-expected second-quarter results, supported by strong performances in trading and investment banking. Nonetheless, its shares edged 0.7% lower as investors took profits.
Asset management giant BlackRock declined 5.9% after its quarterly revenue missed analyst expectations, disappointing investors hoping for more robust top-line growth.
In contrast, Citigroup stood out with a gain of 3.7% after posting second-quarter earnings that exceeded expectations, providing a rare bright spot among bank results.
On the bond markets, yields moved higher as traders responded to the inflation data and repriced expectations for interest rates. The yield on the 10-year U.S. Treasury note rose 1.2% to 4.491%, while the 2-year yield climbed 1.3% to 3.954%.
