The S&P 500 dipped 0.3% at midday on Tuesday as investors digested JPMorgan Chase’s mixed earnings report and grappled with ongoing policy uncertainty tied to President Trump’s recent proposals.
JPMorgan stock tumbled 3% despite beating expectations on profit and revenue, a move that underscored how earnings beats can be overshadowed by weaker guidance and broader market caution.
US stocks midday: Mixed earnings and market selloff
JPMorgan reported adjusted fourth-quarter earnings per share of $5.23, surpassing the consensus estimate of $4.86 and representing a 7.6% beat.
The bank’s managed revenue reached $46.8 billion, exceeding the consensus projection of $46.25 billion.
Net interest income climbed 7% year-over-year to $25.1 billion, reflecting the bank’s pricing power in lending despite the uncertain interest-rate environment.
Yet the market rewarded this outperformance with a sell-off.
JPMorgan shares tumbled from $324.46 at Monday’s close to $315.93 by midday Tuesday, representing a 2.6 to 3% decline despite the earnings beat.
The culprit was clear: investment banking fees fell 5% in the quarter to $2.35 billion, disappointing investors who had expected mid-single-digit growth after a record 2024 deal-making environment.
The broader market reflected the banking sector’s weakness.
The S&P 500 fell 0.4% midday, while the Dow Jones Industrial Average slipped 399 points, or roughly 0.8%, and the Nasdaq Composite declined 0.2%.
Both the S&P and Dow were coming off all-time closing highs set on Monday, leaving the market vulnerable to profit-taking and risk-off sentiment.
Beyond JPMorgan, other financial stocks weighed on indices.
Delta Air Lines fell 3.3% despite beating fourth-quarter profit expectations, as its 2026 guidance disappointed investors and revenue missed estimates.
Policy uncertainty dampens risk appetite
The midday weakness reflected mounting investor anxiety over Trump administration proposals.
While credit card stocks stabilized overnight after Monday’s brutal selloff tied to Trump’s 10% interest-rate cap proposal, financial sector vulnerability remained a theme.
The broader concern centered on policy execution risk: would Trump’s proposals become law, and if so, how would they reshape bank profitability and credit availability?
Additionally, ongoing tensions between Trump and Federal Reserve Chair Jerome Powell, including the recent DOJ criminal investigation into Powell, continued to weigh on sentiment.
Investors worried that threats to Fed independence could ultimately trigger higher inflation and market volatility if monetary policy becomes politicized.
December consumer inflation data came in line with expectations, with the Consumer Price Index rising 2.7% year-over-year and core inflation at 2.6%, the lowest since 2021.
The softer-than-feared inflation print offered some relief and lifted Treasury yields slightly, with the 10-year yield easing to 4.17%.
Investors will watch earnings reports from Bank of America, Citigroup, and Wells Fargo later this week to gauge whether JPMorgan’s investment banking weakness is sector-wide.
Meanwhile, the market’s ability to break away from policy headlines and focus on fundamentals will likely determine whether Tuesday’s midday decline becomes a broader pullback or a brief correction before renewed strength.
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