Investing.com — The S&P 500 gave up gains to close lower Thursday as strong earnings from the banking sector was offset by Apple-led weakness in tech.
At 4:00 p.m. ET (21:00 GMT), the {{169|Dow Jones Industrial Average} fell 68 points, 0.2%, the index fell 0.2%, and the fell 0.9%.
The main Wall Street indexes had recorded strong gains on Wednesday, helped by benign inflation data and strong bank earnings. Investors also welcomed a U.S.-brokered ceasefire deal between Israel and Hamas, which heralds cooling geopolitical tensions in the Middle East.
Apple (NASDAQ:) leads tech slide on report of soft China sales
Apple, down 4%, led a slide in tech after research firm Canalys reported that the iPhone sales fell in 2024 as the iPhone maker lost its top spot to local smartphone rivals including Vivi and Huawei technologies.
Apple sold 42.9M smartphones in China in 2024, down 17% year-over-year, compared to 51.8 million in 2023, Canalys data showed.
The broader slide in tech came despite another dip in Treasury yields on easing fears of a no Fed rate cuts this year.
Federal Reserve governor Christopher Waller welcomed recent data showing slowing inflation, saying that if the trend continues, then it is “reasonable to think rate cuts could come in the first half of the year.”
Treasury yields fell sharply, with the 1 yield down around 5 basis points to 4.6%.
Retail sales disappoint
US increased at a slower-than-anticipated month-on-month rate in December, in the latest data point that could paint a picture of the state of the American economy heading into the new year.
Retail sales grew by 0.4% last month, decelerating from an upwardly revised pace of 0.8% in November, and below the 0.6% expected.
Elsewhere, the number of Americans filing for ticked up by more than expected to 217,000 in the week ending on January 11, rising from an upwardly revised mark of 203,000 in the previous week.
This economic weakness has taken some of the gloss from the prior session’s healthy gains after showed inflation unexpectedly eased in December, albeit slightly. The in particular read slightly lower than expected, while the headline figure was in line with expectations.
The data sparked some bets that cooling inflation will invite more interest rate cuts from the Federal Reserve, especially after the , released on Tuesday, read lower than expected.
Markets are still pricing in about two rate cuts this year, half of the four initially projected for the year. Higher-for-longer rates signal some pressure on risk-driven assets in the coming months.
Bank earnings continue
The banking sector will remain in focus Thursday after more solid quarterly earnings.
Morgan Stanley (NYSE:) stock rose 4% after its profit increased in the fourth quarter, fueled by a wave of dealmaking for the investment bank.
Bank of America (NYSE:) stock fell 1% even as the scond-largest US lender reported higher profit as its investment bankers capitalized on resurgence in dealmaking in the fourth quarter.
These numbers followed buoyant returns from several of their peers on Wednesday.
JPMorgan Chase (NYSE:) posted an all-time high annual profit underpinned by a fourth-quarter recovery in markets, while Goldman Sachs (NYSE:) logged its best-ever quarterly income, Wells Fargo’s (NYSE:) bottom-line figure topped estimates, and Citigroup (NYSE:) swung to a profit.
(Peter Nurse, Ambar Warrick contributed to this article.)
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