NextFin News - U.S. stocks finished slightly lower Tuesday as big-bank earnings kicked off the third-quarter reporting season with mixed results and chip stocks extended their slide. The S&P 500 ended nearly flat. The Dow, which had opened more than 240 points higher, gave up its early gains and closed lower, while the Nasdaq slipped. Chip selling was fueled by an overnight rout in Asia and worries about Chinese memory competition and crowded AI-capex positioning. Goldman Sachs delivered a blowout quarter, and JPMorgan recovered from a rare earnings miss.
The Dow Jones Industrial Average fell 0.35%
The S&P 500 Index fell 0.02%
The Nasdaq Composite declined 0.15%
Stock & Sector Performance
Banks were the standout sector, and their reactions diverged. Goldman Sachs jumped about 3.5% after reporting earnings per share of $17.01 against the $13.02 LSEG consensus, with equities trading revenue up 72% from a year earlier and record advisory revenue. JPMorgan Chase missed with EPS of $5.57 against a $5.90 estimate, with fixed-income trading and expenses cited. Even so, its shares reversed an early drop of about 3% to finish higher, helped by strong net interest income guidance. Wells Fargo had a mixed report, with an EPS beat but misses on net interest income and revenue, and its CFO flagged slowing trading activity late in September. Citigroup beat on the top and bottom lines. UnitedHealth also jumped on a beat-and-raise quarter.
The Russell 2000 fell about 0.4% to roughly 2,783.
Hot Sectors to Watch
Semiconductors were the market's pressure point. Samsung and SK Hynix each fell close to 8% in Asia and the Kospi slid 6.5%, as concerns about Chinese memory competition and crowded AI-capex positioning spilled over. U.S. chip stocks followed, and comments from Broadcom's CEO about speculative AI investing added to the selling. This now reads as a second consecutive day of weakness in a sector that has led the market all year, which makes it an early rotation signal rather than a confirmed trend break.
Financials are the second theme to watch. The KBW Nasdaq Bank Index is down 8.4% over the past three months, while the S&P 500 is up more than 3%. Tuesday's mixed prints suggest Wall Street-driven trading and advisory strength is carrying the large banks while other lines of business are less certain.
Major Story of the Day
The big-bank earnings reports were the central story. JPMorgan's profit rose to $15.3 billion from $14.4 billion a year earlier, but revenue of about $50.9 billion fell short of the $51.2 billion expected. Goldman's results, led by a 72% jump in equities trading and record advisory revenue, drew the strongest reaction, though the firm's deal pipeline shrank. The split reaction showed how selective investors have become. One market observer noted that the S&P 500 is setting record highs while breadth keeps deteriorating, with the median stock trading 16% below its peak, the weakest breadth since the dot-com bubble.
After-Hours Earnings Preview
Bank earnings continue Wednesday, alongside the September Consumer Price Index report. Investors will watch whether the inflation data eases concerns about further Fed rate hikes after a week of elevated Treasury yields and oil prices.
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