Dow falls 0.35%, Nasdaq slips 0.15% as major banks retreat following earnings reports
Nvidia, Meta, and Oracle gain; U.S. Consumer Price Index (CPI) scheduled for release today at 9:30 PM KST
Wall Street’s three major indices finished slightly lower on Oct. 13 (local time). Financial stocks weakened as major banks began reporting quarterly results, while memory and semiconductor equipment stocks faced selling pressure. However, gains in select mega-cap tech shares helped limit the overall decline.
The Dow Jones Industrial Average fell 180.45 points, or 0.35%, to close at 51,670.10. The S&P 500 Index edged down 1.79 points, or 0.02%, to 7,805.45, while the Nasdaq Composite shed 41.52 points, or 0.15%, to finish at 27,204.38.
Shares of major banks that released earnings all trended lower. JPMorgan Chase fell 0.86% and Wells Fargo dropped 3.10%, while Citigroup and Goldman Sachs slid 5.60% and 0.23%, respectively.
The performance metrics varied by institution. JPMorgan’s earnings per share (EPS) fell short of market expectations. While Wells Fargo’s profit beat estimates, its net interest income (NII) and sales revenue disappointed. Both Citigroup and Goldman Sachs saw their share prices decline despite posting profits that exceeded market forecasts.
In the semiconductor sector, weakness was pronounced among memory and equipment manufacturers. Micron Technology fell 3.63% amid concerns over intensifying competition after Chinese memory maker CXMT reportedly made progress in developing next-generation DRAM architecture. However, analysts noted that the commercial viability and actual competitiveness of the new technology remain to be verified.
Applied Materials tumbled 6.69% after the company failed to provide an outlook for the Wafer Fab Equipment (WFE) market during an investor event, despite presenting long-term growth targets. Peer equipment makers Lam Research and KLA also retreated, falling 2.73% and 3.22%, respectively.
Sentiment was further dampened by remarks from Broadcom CEO Hock Tan. Speaking at an event in Singapore the previous day, Tan cautioned against excessive expectations for artificial intelligence (AI), likening the behavior of some AI investors to "gambling."
Despite the broader sector weakness, not all chip stocks ended in the red. Nvidia rose 0.97%, AMD climbed 1.90%, and both Broadcom and Intel gained 0.73% and 1.44%, respectively. The Philadelphia Semiconductor Index closed at 12,208.80, down 27.99 points or 0.23% from the previous session.
Mega-cap tech shares showed mixed performance. Oracle jumped 4.23% and Meta rose 2.63%, while Microsoft and Alphabet posted modest gains of 0.42% and 0.30%. Apple edged up 0.09%, whereas Amazon and Tesla declined 0.37% and 0.74%, respectively.
The Dow was weighed down by losses in Johnson & Johnson and Caterpillar. Johnson & Johnson shares tanked 5.73% despite the company raising its annual guidance, as its third-quarter results were hit by one-off costs related to a proposed settlement for talc-related litigation. Caterpillar also fell 3.33%.
In the energy sector, ExxonMobil and Chevron rose 1.12% and 1.27%, respectively. Crude oil prices ended mixed, with West Texas Intermediate (WTI) for November delivery rising $0.40 to $94.14 per barrel, while Brent crude for December delivery fell $0.96 to $105.69.
In the U.S. Treasury market, which resumed trading after the Columbus Day holiday, yields showed divergent movements across maturities. Near the close of the New York stock market, the 10-year Treasury yield stood at 5.216%, down 0.027 percentage points from the previous session on Oct. 9. The policy-sensitive 2-year yield rose 0.002 percentage points to 4.791%.
Market participants are now pivoting to the September Consumer Price Index (CPI), due at 9:30 PM today (KST). Economists polled by the Wall Street Journal expect a 3.6% year-on-year increase, up from 3.4% in August. Core CPI, which excludes volatile food and energy prices, is projected to rise 2.5% year-on-year.
A key focal point for this inflation print will be the extent to which rising energy costs have bled into the prices of other goods and services. Alongside corporate earnings, the pace of inflation and its underlying components will serve as critical barometers for the Federal Reserve’s future interest rate trajectory.
