Jan 13 (Reuters) – U.S. stock index futures slipped on Friday as quarterly results from a number of major U.S. banks fueled fears that the Fed’s aggressive tightening of monetary policy was beginning to weigh on growth.
JPMorgan Chase & Co reported more impressive-than-expected fourth-quarter earnings on strong trading performance. At the same time, the bank reserved $1.4 billion for possible loan losses. The lender’s shares sank 2.9% in over-the-counter trading.
Wells Fargo & Co shed 3.9% after the bank reported a 50% drop in quarterly profit as reserves build up in preparation for worsening credit quality amid a weakening economy.
Shares of Bank of America Corp followed suit, falling 2.5% despite higher-than-expected fourth-quarter earnings.
Quotes of Citigroup fell by 2.8% after the report.
Wall Street indexes showed gains in main trades yesterday after the release of inflation data, which showed that consumer prices in the US declined on a monthly basis for the first time in more than 2.5 years. Against this backdrop, expectations have strengthened that the Fed will move to a less aggressive tightening of monetary policy.
Money markets predict with a 90.6% probability that the Fed will raise the key rate by 25 basis points at the upcoming meeting in February, and, in their opinion, the rate will peak at 4.9% by June.
Investors will also be closely watching today’s University of Michigan Consumer Sentiment Index and Minneapolis Fed Chairman Neil Kashkari’s speech.
Dow futures were down 0.78% by 16:11 GMT, S&P 500 down 0.93%, Nasdaq 100 down 1.1%.
Shares of Tesla Inc tumbled 6% in over-the-counter trading after the company slashed prices for its best-selling electric vehicles in the US and Germany after fourth-quarter deliveries fell short of Wall Street expectations.
Delta Air Lines Inc shed 5.3% as the company lowered its current quarter earnings forecast due to rising operating costs.
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