JPMorgan and Wells Fargo, two major U.S. banks, ended the second quarter nearly flat after reporting their quarterly results. JPMorgan’s stock rose by 0.6% while Wells Fargo eased by 0.3%. Both banks reported higher profits for the quarter but also revealed that they have set aside more money for expected losses from commercial real estate loans. As a result, the S&P 500 banks index fell by 0.9%.
However, UnitedHealth Group, a health insurance company, saw its stock rally following better-than-expected second-quarter earnings. UnitedHealth shares jumped by 7.2%, helping the Dow Jones Industrial Average to end the day higher. Other health insurers such as Humana and Cigna also saw their shares advance.
Overall, the S&P 500 ended the day slightly down, with the energy sector and financials being the biggest drags on the index. The energy sector experienced a decline of 2.8%, while financials fell by 0.7%. Despite the slight dip, all three major U.S. stock indexes posted solid weekly gains. The Dow was up by 0.3%, the S&P 500 rose by 0.1%, and the Nasdaq dropped by 0.2%.
Analysts expect S&P 500 earnings to have declined by 8.1% in the second quarter compared to the same period last year, according to Refinitiv data. However, many companies tend to beat expectations during earnings season.
The recent sell-off in bank stocks may be attributed to recent strong gains. The S&P banks index and the KBW regional bank index both ended their five-session winning streaks, with the latter falling by 1.9% on the day.
The day’s quarterly reports unofficially marked the beginning of the second-quarter U.S. earnings season. Volume on U.S. exchanges was slightly lower than average, with 10.72 billion shares traded.
For the week, the Dow was up by 2.3%, the S&P 500 rose by 2.4%, and the Nasdaq advanced by 3.3%. The S&P 500 has gained 17% year-to-date.
Citigroup shares fell by 4% after the lender reported a significant decline in quarterly profit. BlackRock also saw its shares drop by 1.5% following a decline in quarterly revenue.
Looking ahead, investors will focus on upcoming earnings reports, particularly from growth giants like Tesla, whose shares rose by 1.3%. Tesla is set to report its earnings on Wednesday.
Some strategists believe that stocks may experience fatigue and a lack of conviction in the coming weeks, given the significant rally seen so far this year.
Overall, while bank and financial shares were mostly lower on the day, the U.S. stock market still experienced solid weekly gains, reflecting resilience and optimism among investors.