US stock indexes slipped slightly on Tuesday, with the S&P 500 and the Nasdaq Composite both sliding as semiconductor shares came under pressure. Investors were also sorting through a mixed batch of quarterly earnings, including reports from major US banks.
Healthcare was the heaviest weight on the S&P 500, as Johnson & Johnson dropped 6.8% even though the company beat profit forecasts.
Chip shares and Johnson & Johnson weigh on indexes
Information technology stocks moved sideways in choppy trading. Memory chipmaker Micron Technology lost 4.6%, while data storage companies Western Digital and Seagate each slipped between 1% and 2%.
Some offsetting gains came from Apple, which hit a record high, and Microsoft, which rose 0.9%. A 2% gain in Meta also lifted the communication services sector and limited losses on the S&P 500.
At 12:23 p.m. ET, the Dow Jones Industrial Average was down 173.96 points, or 0.34%, at 51,676.77. The S&P 500 had shed 9.38 points, or 0.12%, to 7,798.04, and the Nasdaq Composite was off 38.24 points, or 0.14%, at 27,207.66. Caterpillar and Honeywell were the largest drags on the Dow.
Bank earnings and the yield curve draw attention
Citigroup dipped 3.4%, while Goldman Sachs rose about 0.5%, after both banks topped profit estimates. Wells Fargo fell 1.5% after its net interest income missed expectations.
JPMorgan Chase swung between gains and losses after posting a rare profit miss. Kathleen Brooks, research director at XTB, said a flattening yield curve, which typically signals rising credit risks, was weighing on banks. She said investors tend to price such conditions in early, which she linked to the pressure on US banks with large retail units, such as JPMorgan and Citi.
Earlier hopes of a strong earnings season had been supporting the broader market, despite geopolitical tension, surging bond yields and worries about energy-driven inflation. Peter Cardillo, chief market economist at Spartan Capital Securities, said that AI-related weakness was creating unease, and that trading would stay uneven until earnings season gained full momentum.
Inflation data and Fed comments loom over markets
Elevated crude prices have stoked inflation concerns and pushed bond yields to multi-year highs. Still, recent US economic data showing weaker job growth and lower-than-expected inflation have reduced bets on near-term interest rate hikes.
Attention now turns to the September readings for consumer and producer prices, along with retail figures, all due this week. Comments from regional Federal Reserve presidents Thomas Barkin and Susan Collins were also expected later in the day.
Bumble jumped 56% to a year high after the dating-app operator agreed to go private in a $1.3 billion deal. Domino’s Pizza lost 3.8% after scaling back its full-year sales outlook.
Breadth was negative. Declining issues outnumbered advancers by 1.22 to 1 on the NYSE and by 1.9 to 1 on the Nasdaq. The S&P 500 recorded 14 new 52-week highs and 5 new lows, while the Nasdaq Composite logged 33 new highs and 344 new lows.
