US close: Geopolitics, earnings and Fed uncertainty sink stocks

Underwhelming quarterly results from the banking sector and escalating tensions in the Middle East sunk US stocks on Friday, with the Dow falling for the fifth straight day.

Reports of an imminent attack on Israel by Iran sent shockwaves through markets, with Israel said to be readying for a strike that could arrive in next 48 hours. The US government also moved warships into place to defend Israel from a potential attack.

The worries saw investors ditch equities and pile into bonds – the 10-year US Treasury yield was down 6.3 basis points at 4.532% – as well as drive up the value of the US dollar and gold in a flight to safety.

As such, the Dow finished the session 1.24% lower, with just four stocks putting in gains by the close of play. That resulted in a weekly loss of 2.45% for the index – its worst weekly performance in 13 months. Meanwhile, the S&P 500 dropped 1.46% and the Nasdaq sunk 1.62%.

Markets were also still reeling from Wednesday's hotter-than-expected inflation reports, which all but guaranteed that the Federal Reserve would wait for longer before starting to cut interest rates, with recent economic data continuing to prove more robust than predicted.

"Once again, the inflation dragon has stirred, sending ripples of uncertainty through financial markets and casting doubts on the Federal Reserve's interest rate plans," said Bob Schwartz, senior US economist at Oxford Economics.

"Stock prices tumbled and bond yields spiked in the days following the March consumer price report, which revealed a third consecutive month of higher-than-anticipated inflation. The markets are now pricing fewer rate cuts than the Fed projected at the March policy meeting."

Also dampening the mood on Friday was Jeffrey Schmid, the head of the Kansas City Fed, who said the central bank could afford to be patient before making any changes to monetary policy. He said the Fed should "wait for clear and convincing evidence that inflation is on track to hit our 2% target before adjusting the stance of policy".

In US economic data on Friday, the import price index increased at a month-on-month pace of 0.4% (consensus: 0.3%), as fuel imports jumped, while the University of Michigan consumer sentiment index fell to 77.9 in April from 79.4 in March (consensus: 79.0).

Banks disappoint

JPMorgan Chase & Co, Wells Fargo and Citigroup all finished in the red after the release of their first-quarter results.

The largest of the three, JPMorgan, saw shares slide 6% after net interest income rose a less-than-expected 11% to $23.2bn; Wells Fargo topped profit forecasts comfortably but shares were down 0.4% after posting an 8% decline in net interest income; while Citi dropped 1.7% as profits sank 27% on the back of restructuring charges.

Investment banking firm BlackRock also underwhelmed, dropping 2.9% despite beating both earnings and revenue forecasts.

US Steel finished lower after shareholders gave the green light to the controversial $15bn takeover by Nippon Steel, which has drawn criticism from politicians and workers unions.

Dow Jones - Risers

Apple Inc. (AAPL) $176.55 0.86%
Travelers Company Inc. (TRV) $221.10 0.32%
Visa Inc. (V) $275.96 0.10%
Walmart Inc. (WMT) $60.14 0.08%

Dow Jones - Fallers

JP Morgan Chase & Co. (JPM) $182.79 -6.47%
Intel Corp. (INTC) $35.69 -5.16%
Walt Disney Co. (DIS) $114.01 -2.68%
Boeing Co. (BA) $169.55 -2.20%
Cisco Systems Inc. (CSCO) $48.49 -2.10%
Goldman Sachs Group Inc. (GS) $389.49 -2.01%
3M Co. (MMM) $91.31 -2.01%
International Business Machines Corporation (CDI) (IBM) $182.27 -1.95%
Chevron Corp. (CVX) $158.96 -1.81%
Caterpillar Inc. (CAT) $365.63 -1.71%

S&P 500 - Risers

Globe Life Inc. (GL) $59.09 20.17%
Nektar Therapeutics (NKTR) $1.67 5.70%
State Street Corp. (STT) $75.78 2.53%
Kimco Realty Corp. (KIM) $18.10 0.89%
Apple Inc. (AAPL) $176.55 0.86%
Fastenal Co. (FAST) $70.45 0.82%
Progressive Corp. (PGR) $203.90 0.81%
AFLAC Inc. (AFL) $80.25 0.80%
Allstate Corp (The) (ALL) $166.81 0.72%
D. R. Horton Inc. (DHI) $151.71 0.68%

S&P 500 - Fallers

Arista Networks Inc. (ANET) $271.22 -8.55%
Zoetis Inc (ZTS) $149.98 -7.84%
FMC Corp. (FMC) $56.75 -7.78%
VF Corp. (VFC) $12.11 -7.77%
JP Morgan Chase & Co. (JPM) $182.79 -6.47%
Albemarle Corp. (ALB) $122.58 -5.93%
Foot Locker Inc. (FL) $21.92 -5.72%
AES Corp. (AES) $16.85 -5.44%
Advance Auto Parts (AAP) $70.54 -5.18%
Intel Corp. (INTC) $35.69 -5.16%

Nasdaq 100 - Risers

Qurate Retail Inc. (QRTEA) $1.01 1.00%
Apple Inc. (AAPL) $176.55 0.86%
Biomarin Pharmaceutical Inc. (BMRN) $92.22 0.83%
Fastenal Co. (FAST) $70.45 0.82%
Monster Beverage Corp (MNST) $55.01 0.51%

Nasdaq 100 - Fallers

JD.com, Inc. (JD) $25.39 -5.93%
Intel Corp. (INTC) $35.69 -5.16%
NetEase Inc. Ads (NTES) $92.15 -5.15%
Baidu Inc. (BIDU) $97.54 -4.67%
Mercadolibre Inc. (MELI) $1,444.14 -4.21%
Microchip Technology Inc. (MCHP) $85.64 -4.08%
Seagate Technology Plc (STX) $85.19 -4.04%
Micron Technology Inc. (MU) $122.52 -3.91%
Sirius XM Holdings Inc (SIRI) $3.21 -3.89%
Dollar Tree Inc (DLTR) $125.21 -3.87%