The S&P 500 fell for the second consecutive session Wednesday, dropping 0.5% as earnings reports from major banks disappointed investors and technology stocks retreated from recent highs tied to the artificial-intelligence frenzy.
All told, the S&P 500 lost 37.14 points to close at 6,926.60. The Dow Jones Industrial Average dipped 42.36 points, or 0.1%, to 49,149.63. The Nasdaq composite fell 238.12 points, or about 1%, to 23,471.75.
Despite the headline losses, more stocks on Wall Street rose than fell on the day, with oil companies and smaller-capitalization stocks providing a partial offset as crude prices climbed on supply concerns tied to protests in Iran.
Bank earnings weigh on markets
Wells Fargo fell 4.6% after the San Francisco-based bank reported weaker profit and revenue for the fourth quarter of 2025 than analysts expected, with lower trading fees and other miscellaneous items cited as drags. Bank of America shed 3.8% even though it reported a stronger profit than expected; analysts pointed to concerns about the size of its upcoming expenses. Citigroup, which is in the midst of a turnaround under Chair and Chief Executive Jane Fraser, fell 3.3% following its own quarterly earnings release.
Companies across industries are under pressure to report strong earnings growth to justify how far their stock prices have risen. Analysts are looking for S&P 500 businesses to report earnings per share for the final three months of 2025 roughly 8% higher than a year earlier, according to FactSet.
Technology stocks retreat
Technology stocks handed back a portion of their gains from recent years, with Nvidia falling 1.4% and Broadcom sinking 4.2%. Biogen dropped 5% after the biotechnology company said it expects a hit to its fourth-quarter 2025 profit from research and development expenses and other costs it acquired.
Some critics have argued that technology stock prices rose too far too fast on expectations surrounding artificial intelligence.
Energy and smaller stocks offset losses
Oil companies provided the strongest counterweight to the day’s declines. Exxon Mobil rose 2.9% and Chevron climbed 2.1% as the price for a barrel of benchmark U.S. crude oil rose 1.4% to settle at $62.02. Brent crude, the international standard, rose 1.6%, at one point pushing its year-to-date gain to nearly 10%.
Oil prices have rallied after protests swept Iran, a member of OPEC that helps coordinate crude production levels among member nations. The unrest raised concerns about potential disruptions to supply.
Stocks of smaller companies also outperformed the broader market, with the Russell 2000 index rising 0.7%.
Economic data, Fed outlook
Several reports on the U.S. economy released Wednesday produced a mixed picture. Retail spending rose more than economists expected in November, a positive signal for consumer activity, which drives the bulk of U.S. economic output. A separate report showed wholesale prices rose modestly in November, following data released Tuesday showing consumer inflation remained above the Federal Reserve’s 2% target.
Taken together, the reports did little to change Wall Street’s expectation that the Fed will cut its main interest rate at least twice in 2026, likely beginning around June, according to CME Group.
In the bond market, the 10-year Treasury yield stood at 4.18% on Wednesday, according to Federal Reserve Economic Data, as investors moved toward assets seen as safer during the equity-market pullback.
International markets
Japan’s Nikkei 225 rose 1.5% to another record high as expectations grew that Prime Minister Sanae Takaichi may call general elections. Markets were mixed elsewhere: Hong Kong’s benchmark index rose 0.6%, while Shanghai stocks fell 0.3% after a report showed China’s trade surplus surged 20% in 2025 to a record despite tariffs imposed by the United States.