U.S. Stocks retreated Tuesday as a decline in bank shares dampened investor sentiment.
The Dow Jones Industrial Average was down 212 points, or 0.6%. The S&P 500 dipped 0.6%, and the Nasdaq Composite pulled back by 0.8%.
Banks fell broadly after Moody’s downgraded the credit rating on several banks, including M&T Bank and Pinnacle Financial. The credit agency also placed Bank of N.Y. Mellon and State Street on review for a downgrade.
Goldman Sachs and JPMorgan Chase traded about 1% lower in the premarket. The SPDR S&P Regional Banking ETF (KRE), which tracks a group of smaller banks, dipped more than 2%.
Earnings season continued. UPS shares dropped 5% after the delivery giant reported weaker-than-expected revenue for the second quarter. The company also lowered its full-year revenue outlook. Educational tech company Chegg popped nearly 20% after reporting second-quarter revenue of $183 million, beating analysts’ estimate of $177 million, per Refinitiv.
The corporate earnings season has so far been better-than-expected. With roughly 89% of S&P 500 stocks done reporting quarterly results, about four-fifths of them have beaten Wall Street’s expectations, according to FactSet.
Futures came somewhat off lows Tuesday morning after Philadelphia Federal Reserve President Patrick Harker signaled the central bank could be at the end of its current rate-hiking cycle.
On the economic data front, traders are looking ahead to July’s consumer price index report, out Thursday. The inflation metric could put Wall Street’s belief in a soft landing to the test. Economists polled by Dow Jones are calling for a monthly increase of 0.2% in July and a year-over-year rise of 3.3%.
Wall Street is coming off a strong performance Monday. The 30-stock Dow surged more than 400 points, or nearly 1.2%, for its best day since June 15. The Nasdaq Composite added 0.6%, and S&P 500 closed higher by 0.9%. The tech-heavy Nasdaq and the S&P 500 broke four-straight sessions of losses.
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