Stocks fell on Friday after a series of positive results from big banks fueled concerns that the Federal Reserve will raise interest rates at its next two meetings.
Still, the major indices gained during the week. The Dow Jones rose 400 points, or 1.2%. The S&P 500 gained 0.8% and the Nasdaq Composite gained 0.3%.
JPMorgan Chase on Friday reported first-quarter earnings and revenue that beat expectations, boosted by the Federal Reserve's interest rate hike campaign. Citigroup, Wells Fargo and PNC Financial also reported strong results.
CEO Jamie Dimon warned investors on the company's post-earnings conference call that they should prepare for interest rates to be higher for longer than expected.
Wall Street seems to have taken note. Analysts increased their bets on a quarter-point rate hike at the Federal Reserve meeting in May and another in June.
Federal Reserve Governor Christopher Waller said Friday that the central bank needs to continue tightening monetary policy, which will further impact markets.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said it is “definitely” possible that the United States could enter a mild recession after the tumult in banking last month.
Meanwhile, retail sales data declined more than expected, suggesting that Americans' purchasing power and the U.S. economy are weakening.
Consumer confidence remained fairly stable in April, even as concerns about a recession persist, according to the latest monthly survey from the University of Michigan.
“There was too much news to digest this morning, but the key takeaway is that the Fed has room to do more damage,” Edward Moya, senior market analyst at OANDA, said in a note.
The Dow Jones fell 144 points, or 0.4%.
The S&P 500 fell 0.2%.
The Nasdaq Composite sank 0.4%.
As stocks stabilize after the trading day, levels could still change slightly.
