U.S. stocks continued their decline during Wednesday's early trading session, with the Dow Jones Industrial Average falling by 200 points. Traders were digesting the latest batch of earnings reports from major banks, while geopolitical risks continued to cast a shadow over market sentiment. As the United States signaled a potential direct intervention in the Iran situation, investors once again flocked to precious metals as a safe-haven asset.
The Dow dropped 210.73 points, or 0.43%, to 48,981.26; the Nasdaq Composite fell 316.43 points, or 1.33%, to 23,393.44; and the S&P 500 declined by 59.07 points, or 0.85%, to 6,904.67. Shares of Wells Fargo moved lower after the company reported fourth-quarter revenue that fell short of expectations. In contrast, Citigroup's fourth-quarter performance exceeded market forecasts. U.S. stocks closed lower on Tuesday, with the Dow shedding nearly 400 points. The financial sector was the worst-performing industry group. JPMorgan Chase shares tumbled more than 4% at the close, driven by weaker-than-expected investment banking fees in the fourth quarter. Goldman Sachs and Bank of America also followed with declines. Former U.S. President Donald Trump continued his criticism of Federal Reserve Chair Jerome Powell on Tuesday. Concurrently, market concerns over central bank independence intensified as the U.S. Department of Justice initiated a criminal investigation into the Fed Chair. Paul Meeks, Head of Technology Equity Research at Freedom Capital Markets, suggested that stock prices may have begun to reflect the potential impact of Trump's demands. "This is a delayed reaction to the threats against Chair Powell and the bank earnings—companies are talking about setting a credit rate cap of 10%... this only creates unnecessary anxiety," he said. The veteran technology analyst also noted that Tuesday's sell-off might present "some attractive buying opportunities" ahead of upcoming 2026 earnings guidance and AI capital expenditure plans from hyperscale cloud service providers. Wednesday's market faced a dense lineup of catalysts: earnings from major Wall Street banks, a series of speeches from Federal Reserve officials, U.S. Producer Price Index (PPI) and retail sales data, and a potential Supreme Court ruling on cases related to the Trump administration's tariff policies under the International Emergency Economic Powers Act (IEEPA). Padhraic Garvey, Head of Americas Research at ING, stated in a report that his "base case" assumes the IEEPA tariffs will be ruled invalid, and he believes the market generally shares this view. He noted that if the ruling is issued, it would place some pressure on the Trump administration, though the government could ultimately find alternative ways to "rebuild" the tariff system. Marija Veitmane, Head of Equity Research at State Street Bank, commented, "The start of this earnings season yesterday was not as ideal as we typically see. The Iran factor significantly elevates uncertainty. With multiple scenarios coexisting and spanning a wide range, it's difficult to directly assess cross-market transmission paths, but uncertainty has indeed increased." On the economic data front, U.S. retail sales for November increased by 0.6% month-over-month, marking the highest growth since July and surpassing the market expectation of 0.4%.
Focus Stocks Rivian announced a recall of over 19,000 electric vehicles in the U.S. and was downgraded to "Sell" by UBS. Intel's stock advanced after former President Trump hinted that Apple had invested in the company. Honeywell's quantum computing unit, Quantinuum, is planning to file for an initial public offering (IPO). AstraZeneca acquired Modella AI to accelerate the development of oncology drugs. Bilibili reported advertising revenue growth exceeding 20% for the 11th consecutive quarter.
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