October 2, 2022

Stocks open lower on Wall Street: JP Morgan weighs down banks

FILE - Pedestrians walk past the New York Stock Exchange on Friday, July 8, 2022, in New York. Stocks are falling on Wall Street on Wednesday, July 13, 2022, after a highly anticipated report on inflation turned out to be even worse than expected. (AP Photo/John Minchillo, File)


NEW YORK (AP) — Stocks are opening broadly lower on Wall Street after another hot reading on inflation, this time for wholesale prices, has investors bracing for another big interest rate hike from the Federal Reserve later this month. Banks were among the big losers in early trading Thursday after JPMorgan Chase reported a 28% drop in earnings for its latest quarter, falling short of forecasts. Another drop in crude oil prices, a signal that investors expect slower economic growth, was weighing on energy companies. The S&P 500 fell 1.9%. The benchmark index is coming off four straight losses and is down 21.7% for the year.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

BEIJING (AP) — Global stocks and Wall Street futures sank Thursday after higher U.S. inflation stoked expectations of more rate hikes that investors worry will chill economic growth.

London and Frankfurt opened lower. Shanghai, Hong Kong and Seoul retreated, while Tokyo gained. Oil prices fell more than $1 to below $100 per barrel.

Wall Street’s benchmark S&P 500 index declined after data Wednesday showed U.S. consumer inflation accelerated to 9.1% in June over a year earlier from May’s 8.6%. That was despite three rate hikes this year by the Federal Reserve.

Investors worry aggressive action by the Fed and other central banks to cool inflation that is at four-decade highs might derail global growth.

“Growth fears are hitting the markets harder than inflation concerns,” Stephen Innes of SPI Asset Management said in a report.

In early trading, the FTSE 100 in London lost 0.4% to 7,126.97 and the DAX in Frankfurt gave up 0.2% to 12,737.64. The CAC 40 in Paris declined declined 1.1% to 5,933.53.

On Wall Street, futures for the S&P 500 and Dow Jones Industrial Average were off 0.7%.

On Wednesday, the S&P 500 lost 0.4%. The Dow fell 0.7% and the Nasdaq composite dropped 0.2%.

In Asia, the Shanghai Composite Index declined less than 0.1% to 3,281.74 and the Hang Seng in Hong Kong shed 0.2% to 20,751.21.

Tokyo’s Nikkei 225 gained 0.6% to 26,643.39. Panasonic Holdings rose 1.1% after the battery maker announced plans for a multibillion-dollar factory to supply Tesla and other automakers in Kansas.

Sydney’s S&P-ASX 200 added 0.4% to 6,650.60 after official data showed employment rose more than expected in June. The Kospi in Seoul advanced 0.3% to 2,322.32.

India’s Sensex gained 0.4% to 53,309.59. New Zealand and Jakarta advanced while Singapore and Bangkok declined.

The Federal Reserve and central banks in Britain, South Korea and some other countries have hiked rates to cool surging prices. The European Central Bank has similar plans.

Traders expect another Fed rate hike this month, probably matching last month’s 0.75 percentage point rise, the biggest in 28 years and three times the usual margin.

Fed officials say a recession is possible but not certain. They point to a strong U.S. job market despite higher borrowing costs.

Traders are looking ahead to the latest quarterly results from big U.S. companies in the next few weeks.

In energy markets, benchmark U.S. crude lost $1.26 to $95.04 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to $96.30 on Wednesday. Brent crude, the price basis for international oil trading, retreated $1.06 to $98.51 per barrel in London. It added 8 cents the previous session to $99.57 a barrel.

The dollar rose to 139.23 yen from Wednesday’s 137.32 yen. The euro declined to $1.0024 from $1.0062.