Wall Street slumps as bank and tech stocks fall

Bank and Tech Stocks Drive Market Decline Despite Broader Gains

The U.S. stock market retreated Wednesday as losses in banking and technology sectors outweighed gains elsewhere, pushing major indexes lower for a second consecutive session after recently reaching all-time highs.

The S&P 500 declined 0.5%, falling 37.14 points to 6,926.60, while the Dow Jones Industrial Average edged down 42.36 points, or 0.1%, to 49,149.63. The tech-heavy Nasdaq composite saw steeper losses, dropping 1% or 238.12 points to 23,471.75.

Major banks were among the day’s biggest decliners following their latest earnings reports. Wells Fargo shares tumbled 4.6% after the San Francisco-based lender reported weaker-than-expected profit and revenue for the quarter, with analysts pointing to lower trading fees and other miscellaneous items as contributing factors.

Bank of America fell 3.8% despite exceeding profit expectations, as investors expressed concerns about projected expenses. Citigroup shares dropped 3.3% as the bank continues its turnaround efforts under Chair and CEO Jane Fraser.

The financial sector’s weakness comes at a critical time when companies across industries face pressure to justify elevated stock prices with strong profit growth. Analysts are expecting S&P 500 companies to report an approximately 8% year-over-year increase in earnings per share for the final quarter of 2025, according to data from FactSet.

In the healthcare sector, Biogen shares declined 5% after the biotechnology company warned of potential fourth-quarter profit impacts due to research and development expenses and other costs from recent acquisitions.

Technology stocks, which have surged dramatically in recent years amid enthusiasm for artificial intelligence, were also significant drags on the market. Nvidia fell 1.4% and chipmaker Broadcom dropped 4.2%, as these high-flying stocks gave back some of their substantial gains that critics have increasingly described as overvalued.

Despite the declines in major indexes, market breadth was actually positive, with more stocks rising than falling on the day. Small-cap stocks outperformed their larger counterparts, with the Russell 2000 index gaining 0.7%.

Energy companies provided the strongest counterweight to the market’s decline. Exxon Mobil rose 2.9% and Chevron climbed 2.1% as oil prices increased. U.S. benchmark crude rose 1.4% to settle at $62.02 per barrel.

The recent rally in oil prices has been partly fueled by protests in Iran, an OPEC member nation, raising concerns about potential production disruptions that could constrain global supply. Brent crude, the international standard, increased 1.6% and briefly reached a year-to-date gain of nearly 10% before retreating later in the session.

Economic data released Wednesday painted a mixed picture of the U.S. economy. Retail sales data showed consumers spent more than economists expected in November, a positive signal for the primary engine of economic growth. Meanwhile, wholesale inflation increased modestly, following Tuesday’s consumer inflation report that showed prices rising at a rate close to economists’ expectations but still above the Federal Reserve’s 2% target.

The combined economic indicators did little to change market expectations that the Federal Reserve will implement at least two interest rate cuts in 2025, likely beginning around June, to support the job market.

In the bond market, Treasury yields declined as investors sought safer investments. The yield on the benchmark 10-year Treasury fell to 4.14% from 4.18% the previous day.

Overseas, Japan’s Nikkei 225 rallied 1.5% to a new record amid speculation that Prime Minister Sanae Takaichi may soon call general elections. Hong Kong stocks rose 0.6%, while Chinese shares fell 0.3% following a report showing China’s trade surplus surged 20% in 2025 to a record level despite U.S. tariffs.