Wall Street stocks were muted on Tuesday after big banks reported mixed earnings. Investors looked ahead to Wednesday's inflation report, while chip weakness weighed on the Nasdaq.
The S&P 500 ended essentially flat, while the Nasdaq closed slightly lower, weighed by chip weakness. Big banks posted mixed results, and investors waited for Wednesday's crucial inflation report.
Banks deliver uneven third-quarter results
Wall Street's big banks reported uneven third-quarter results as equity and bond markets were roiled by ongoing wars, inflation worries and AI outlays. JPMorgan Chase fell short of quarterly profit estimates for the first time in nearly three years. Goldman Sachs, however, beat third-quarter profit expectations on dealmaking and equities revenue.
Third-quarter earnings optimism has helped the market through geopolitical turmoil, surging bond yields and mounting inflation worries. Analysts currently expect year-on-year S&P 500 earnings growth of 30.6% for the July-September period, according to LSEG data.
Chipmakers slide on China competition fears
US chipmakers slid, led by memory-related firms, after reports of a technological advance by China's CXMT raised competition fears. Chips extended Monday's loss, while energy shares gained as WTI settled higher and homebuilders rose after upbeat housing data.
Elsewhere, WTI crude settled up 0.4% while Brent settled down 0.9% as a US-Russia diesel deal offset Saudi Yemen attacks. The dollar slipped against a basket of world currencies, and gold prices eased ahead of the CPI report.
Inflation data and Fed speakers next
Reuters lists the September US CPI report among the events that could move markets on Wednesday, along with developments in the Middle East, energy markets and Treasury yield moves. Fed Vice Chair Michelle Bowman and Richmond Fed President Thomas Barkin are also scheduled to speak.
AI spending is also tied to the broader economy: demand for data center equipment is surging, but much of it goes to imports, which widens the trade deficit and drags on growth.
Source: Reuters via Investing.com
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