Large U.S. banks delivered strong quarterly results, reinforcing signs of a resilient economy, although investors responded cautiously. $JPM exceeded earnings and revenue expectations, yet shares declined as guidance for future net interest income disappointed. Similar reactions followed strong reports from $BAC and $C, suggesting valuations and forward expectations are outweighing headline earnings beats. Overall, the banking sector continues to point to solid economic conditions despite muted share price performance.
Inflation data provided a positive surprise, with both headline and core CPI coming in below expectations. The softer reading strengthened expectations that the Federal Reserve is likely to leave interest rates unchanged in the near term. However, investors remain alert to renewed inflation risks as oil prices recover amid ongoing tensions involving Iran and continued disruption around the Strait of Hormuz. Producer Price Index data due tomorrow could further influence market expectations.
Technology shares faced mixed fortunes. $IBM suffered its steepest intraday decline since 1987 after customers delayed major software deals in favour of spending on servers and memory, weighing on the broader software sector. Meanwhile, semiconductor stocks rebounded strongly after South Korea’s market recovered, with optimism also growing around a potential U.S. listing for $SKHY, supporting renewed strength across the AI-related chip industry.
