Faster Rate Hike Worries Markets After Wholesale Price Report

Barry Adams
14 Jul, 2022
New York City

U.S. stocks accelerated declines after the wholesale prices jumped and bank earnings disappointed investors. 

The S&P 500 index declined 2.1% to 3,724.11 and the Nasdaq Composite index dropped 1.9% to 11,032.01.

The volatile energy prices dropped after the release of the wholesale price report on the worries that the economy may slow down faster than estimated and the Middle Eastern nations may keep the elevated supply flowing.  

Futures of crude oil prices declined $4.40 to $91.85 and natural gas edged down to $6.68 a unit. 

The producer price index soared 11.3% in June from a year ago and increased 1.1% on a monthly basis, the Bureau of Labor Statistics reported Thursday. 

On a monthly basis, the producer price index increased 0.9% in May and jumped 0.4% in April. 

Core producer price index, excluding food and energy, rose 6.4% in June. 

Banks were in focus after JP Morgan earnings disappointed investors. 

JPMorgan Chase declined 3.8% to $107.67 after the bank said second quarter revenues increased 1% to $30.7 billion. 

Net income in the quarter fell 28% to $8.64 billion from $11.95 billion and diluted earnings per share fell to $2.76 from $3.78. 

Return on equity fell to 13% from 18% and return on tangible equity dropped to 17% from 23% a year ago. 

Morgan Stanley dropped 0.9% to $74.26 after the financial services company reported net revenues in the second quarter ending in June fell to $13.1 billion compared to $14.8 billion a year ago. 

Net income fell to $2.5 billion or $1.39 per diluted share compared to net income of $3.5 billion or $1.85 per diluted share for the same period a year ago.