US equity indexes fell on Wednesday as a sell-off in technology and consumer discretionary outpaced the decline in financials, following disappointing earnings from mega-cap banks and mixed wholesale price inflation data.
The Nasdaq Composite slidd 1% to 23,471.75, with the S&P 500 down 0.5% to 6,926.60, and the Dow Jones Industrial Average lower by less than 0.1% to 49,149.63. The communication services sector was among the worst performers, while energy emerged as the standout gainer.
Wells Fargo's (WFC) Q4 sales missed forecast amid weakness in investment banking, wiping the shine off the lender's adjusted earnings beat. Shares fell 4.6%, among the worst performers on the S&P 500. Citigroup (C) declined 3.3% after the lender reported a decline in Q4 net income, while revenue rose from a year earlier.
Meanwhile, Nvidia's (NVDA) H200 artificial intelligence chips are not allowed entry in China, according to directives from Chinese customs authorities, Reuters reported. Shares of Nvidia fell 1.4%, among the Dow's worst performers.
Broadcom-owned (AVGO) VMware is among the firms whose cybersecurity software has been banned by China, Reuters reported, citing two unnamed sources. Shares of Broadcom slumped 4.2%, among the steepest decliners on the Nasdaq.
In economic news, the US Producer Price Index rose by 0.2% in November following a 0.1% increase in October, as expected in a survey compiled by Bloomberg. After excluding food and energy prices, core PPI was flat, below the 0.2% gain forecast and following a 0.3% increase in the previous month.
PPI was up 3% year-over-year in November, both including and excluding food and energy prices.
Morgan Stanley now expects core personal consumption expenditures inflation to rise 0.19% month-over-month in October and 0.16% in November, following the PPI. It had forecast core PCE at 0.15% and 0.11%, respectively, ahead of the PPI print. Core PCE is the Federal Reserve's preferred measure of inflation.
"Our upward revision is explained by stronger-than-expected airfares, healthcare, and financial services inflation," Morgan Stanley said in a note.
The first interest-rate cut is most likely to occur in June, with a 48% chance of a 25-basis-point reduction, according to the CME FedWatch tool. The likelihood of the policy pause continuing in June is 29%.
Meanwhile, Iran has begun summary executions of protestors who have taken to the streets to protest dire economic conditions and rising inflation, according to The Guardian. President Donald Trump has threatened military action against Tehran in support of protestors, the news report said.
Most US Treasury yields fell, with the 10-year yield down 3.1 basis points to 4.14% and the two-year rate lower by 1.2 basis points to 3.52%.
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Silver futures were up 7.3% to $92.65 per troy ounce, after hitting a new all-time high earlier in the session amid mounting geopolitical risks. Gold futures also scaled a new peak before trading up 0.7% to $4,629.8.
West Texas Intermediate crude oil futures slumped 1.5% to $60.24 a barrel, giving up gains of more than 1% intraday.