Investors were worried that rising prices could remain a problem for the US economy. Treasury yields also went up, putting pressure on the stock market. US stock futures fell on Wednesday as inflation in September was higher than expected.
The stock declined around 3% in one update and was down 6% in earlier premarket trading. The bank reported earnings of 91 cents per share, compared with the $1.10 expected in the provided report, while revenue came in at $30 billion against expectations of $30.69 billion. It made $5.79 billion in revenue, more than $900 million above the estimate from StreetAccount. Earlier reporting noted: Stock market today: Why are S&P 500 futures falling despite strong bank earnings? S&P 500 futures fell on Tuesday: Futures linked to the S&P 500 slipped as investors assessed quarterly earnings from major US banks and tracked losses in chip stocks. However, its shares fell 3.4% in premarket trading. Despite the improvement, its shares fell 1% in premarket trading.
Bank of America shares fell after the bank reported its third-quarter results. Earlier reporting noted: Wells Fargo reported higher profit for the third quarter, helped by growth in its loan book and increased interest income. Morgan Stanley’s stock trading business performed especially well. Big bank earnings have struggled to lift stock prices despite strong quarterly results. The market reaction suggests investors are demanding stronger results and better future outlooks from companies this earnings season. Strong demand for chips has supported the sector, but investors are questioning whether stock prices have risen too far. However, she questioned how much further semiconductor valuations could rise. The September inflation report has become a key concern for US stock investors. Investors are now weighing inflation risks against corporate earnings growth as the third-quarter reporting season continues. Dow futures remained slightly higher, while Nasdaq futures came under greater pressure.
Marta Norton, chief investment strategist at Empower, told CNBC that the business fundamentals for chips remained strong.
However, the strong performance was not enough to stop the bank’s shares from falling before the market opened. Inflation came in above expectations on an annual basis, Treasury yields rose, and several major bank and chip stocks declined before the market opened. Earlier reporting noted: JPMorgan Chase posted an increase in third-quarter profit, supported by growth in investment banking and trading.
Goldman Sachs and Citigroup shares also ended lower on Tuesday, even after several major banks reported strong results.
The bank earned $3.03 per share and made $20.34 billion in revenue. Analysts surveyed by LSEG had expected earnings of $2.91 per share and revenue of $19.95 billion. Even after beating both estimates, the stock fell around 1% to 2%, according to CNBC.
Morgan Stanley reported better-than-expected results for the third quarter, but its shares still fell.
