US stocks slide ahead of key earnings

As investors processed a flurry of significant quarterly reports and readied themselves for the start of the big tech earnings season, stocks were trading lower on Tuesday. A 122 point, or 0.4%, decline in the Dow Jones Industrial Average was seen. The Nasdaq Composite was down 1% and the S&P 500 index was down 0.8%.

Markets have not yet been heavily impacted by results season, but that may change on a crucial day for corporate profits. General Electric, General Motors, Dow, 3M, PepsiCo, McDonald’s, and JetBlue Airways were among the companies that released earnings reports prior to the market opening. Visa, Texas Instruments, Alphabet, Microsoft, and other major technology companies are scheduled to release earnings after the close.

Although the coming week may be interesting, it hasn’t gotten off to a very thrilling start, with investors generally taking a risk-off stance during the past 24 hours as they anticipated a slew of earnings reports that will begin today. Before the market opened on Tuesday, McDonald’s, GM, GE, and PepsiCo all reported earnings that were higher than anticipated. The fact that all three major indexes were down, however, limited the impact of the findings on the mood as a whole.

After First Republic Bank (FRC) reported that deposits fell by $72 billion, or 41%, in the first quarter as a result of Silicon Valley Bank’s bankruptcy, fresh financial concerns came into the spotlight. Other local lenders PacWest Bancorp (PACW) and Western Alliance (WAL) also experienced declines as the stock fell 28%.

Worries over the stability of the banking system were revived by lower-than-expected deposit levels, and financials are weighing down the broader market this morning. UBS stock dropped when the Swiss bank, which had agreed to acquire Credit Suisse in the midst of the turbulence last month, revealed a steep decline in profits.

The Conference Board’s index of consumer confidence for April decreased from 104 to 101.3. Inflation predictions for the next year increased by 6.2%, up from 6.3% in March and 6.2% in February.

Consumers’ outlooks for business conditions and employment markets grew more negative. Fewer households than last month anticipate an improvement in business circumstances, while more anticipate a worsening during the following six months. They also anticipate a short-term decrease in the number of jobs available.

Tuesday’s fresh data also revealed that, contrary to economists’ predictions, national home prices increased by 2% in February.

In recent weeks, the stock market has been extraordinarily stable, quiet, and volatile-free. Many people are surprised by the optimism that is pervasive in the equity markets. More investors are buying stocks as there is a growing perception that corporate America can handle higher interest rates better than anticipated.