Key Points
- U.S. stocks fell on Wednesday as investors digested mixed economic news.
- Bank of America, Wells Fargo, and Citigroup all reported strong loan growth.
- Producer price inflation is picking up, with the core PPI up 3.5% in the 12 months to November.
- Strong retail sales data could make the Fed more cautious about cutting interest rates.
U.S. stocks fell on Wednesday as investors processed a mixed bag of news. A fresh round of earnings reports from major banks and new data showing a jump in inflation were enough to send the main indexes lower in early trading.
As of 9:55 AM ET, major U.S. stock indices are trending lower amid a mix of economic data and corporate earnings. The S&P 500 is down 0.61% at 6,921.21, while the tech-heavy Nasdaq 100 has declined 0.84% to 25,525.21. The Dow Jones Industrial Average shows more resilience but remains in the red, down 0.22% at 49,084.10.
The banking sector was in the spotlight, with Bank of America, Wells Fargo, and Citigroup all reporting their latest results. The reports were generally positive, with all three banks showing strong loan growth. Bank of America’s net interest income, a key profitability measure, surged to a record high.
However, the good news from the banks was overshadowed by a less-than-stellar report from JPMorgan Chase on Tuesday. The nation’s largest bank reported a decline in profit, driven by a significant charge related to its acquisition of the Apple Card portfolio. JPMorgan’s CEO, Jamie Dimon, also used the opportunity to warn about President Trump’s proposed cap on credit card interest rates and to defend the Federal Reserve’s independence.
Adding to the market’s unease was a new report on producer prices, which showed that wholesale inflation is picking up. The “core” PPI, which excludes volatile food and energy prices, jumped a substantial 0.7% in October. For the 12 months ending in November, this core inflation measure rose 3.5%, the largest increase since March.
This comes just as other data showed U.S. retail sales were stronger than expected in November, suggesting that consumer spending is still holding up.
While a strong consumer is good for the economy, the combination of rising inflation and robust spending could make the Federal Reserve more hesitant to cut interest rates. This uncertainty is weighing on the market, which had been hoping for a clear path to lower rates in 2026.
