The S&P 500 and Dow Jones Industrial Average retreated from session lows of nearly 2%, but each closed down 0.3% and 0.5%, respectively. Tech heavyweight Nasdaq fell into positive territory to close the session just above breakeven after slipping earlier in the session. JPMorgan Chase ( JPM ) was in the spotlight on Thursday after it reported a bigger-than-expected 28% drop in second-quarter profit, attributing the decline to $1.1 billion in loan loss provisions amid concerns about a possible economic downturn . Shares closed down 3.5%. “In our global economy, we’re dealing with two conflicting factors, operating on different timelines,” said CEO Jamie Dimon. “The US economy continues to grow, and both the labor market and consumer spending, as well as their ability to spend, remain healthy. “ JPMorgan Chase CEO Jamie Dimon speaks at the North American Building Trades Unions (NABTU) 2019 Legislative Conference in Washington, U.S., April 9, 2019. REUTERS/Jeenah Moon “However, geopolitical tension, high inflation, declining consumer confidence, uncertainty about how high interest rates and quantitative tightening should fare and their effects on global liquidity, combined with the war in Ukraine and its damaging effects on global energy and food prices are very likely to have a negative impact on the global economy at some point down the road,” Dimon added. Morgan Stanley ( MS ) reported results that missed analysts’ expectations, dragged down mainly by a drop in investment banking revenue due to volatile market conditions. Shares fell to a session high 0.3% lower after rising 2%. Those results also weighed on the broader financial sector, sending shares of peer banks Citi ( C ) and Wells Fargo ( WFC ) down more than 3% and 0.9%, respectively, ahead of their own earnings on Friday. The moves in stock markets come after all three major indexes fell on Wednesday after new CPI data showed prices across the U.S. economy rose at the fastest pace since 1981. The story continues “Markets had a surprise reaction after the impressive inflation numbers and the 9.1% headline makes the Fed’s job that much more difficult,” said Charlie Ripley, Senior Investment Strategist at Allianz Investment Management. “As a result, the Fed is likely to send an aggressive message at the July meeting, and it would be a mistake to think that a rate hike below 75 basis points is on the cards.” The boom headline even sparked a flurry of speculation among strategists that a 100 basis point hike may now be on the table – a move that would mark the most militant monetary intervention since the early 1990s. Federal Reserve Board member Christopher Waller, in comments on Thursday, maintained his support for a 0.75 percent interest rate hike at the next policymakers’ meeting, but said he would be open to supporting a hike of one. a full percentage point if upcoming economic announcements suggest strong consumer spending. The remarks echoed sentiment shared by Atlanta Fed President Rafael Bostic after Wednesday’s CPI data. “Everything is played out,” Bostic told reporters in St. Petersburg, Florida. Asked if that included raising rates by a full percentage point, he said, “it would mean everything. The exterior of the Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC, U.S., June 14, 2022. REUTERS/Sarah Silbiger Elsewhere Thursday morning, initial jobless claims rose last week in a possible sign that the labor market may cool as the Federal Reserve tightens economic conditions. First-time claims for unemployment insurance in the US rose to 244,000 in the week ended July 9, up 9,000 from the previous period, Labor Department data showed on Thursday morning. Economists polled by Bloomberg had expected the latest number to come in at 235,000. The producer price index for final demand – a measure of wholesale and business prices – rose 11.3% year-on-year in June and 1.1% from the previous month, the Labor Department also said on Thursday, underscoring inflationary pressures in wholesale level. Meanwhile, commodity markets remained under pressure due to growing concerns about shrinking supply. West Texas Intermediate (WTI) crude futures were down $2.24, or 2.33%, at $94.06 a barrel in early trade, and Brent crude was down $1.94, or 1.95%. , at $97.63. — Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc Click here for the latest stock market news and in-depth analysis, including the events that move stocks Read the latest financial and business news from Yahoo Finance Download the Yahoo Finance app for Apple or Android Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn and YouTube
