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US stocks extended losses on Wednesday as weakness in tech megacaps outweighed solid economic data and mixed results from major banks. Markets held steady expectations for the Federal Reserve, while geopolitical tension supported oil and pushed gold to a fresh record.
US equities traded lower for a second straight session, pulling back from record levels. The S&P 500 fell 0.8% by 10 a.m. New York time, while the NASDAQ 100 dropped 1.4%. The Dow Jones Industrial Average declined 0.4%, and the Russell 2000 slipped 0.2%.
Technology megacaps drove much of the pressure, with the Bloomberg Magnificent 7 Total Return Index down 1.7%. Traders pointed to continued selling in large-cap growth stocks as the key driver of the move. Outside the US, European shares held up better, with the Stoxx Europe 600 up 0.1%, while the MSCI World Index fell 0.5%.
New US data did not move rate expectations in a meaningful way. The producer price index rose 0.2% in November after a 0.1% increase in the previous month, with energy costs driving much of the monthly gain. The report came in stronger than expected, yet traders saw little reason to adjust the outlook for policy.
Retail sales provided a clearer sign of demand. The value of purchases rose 0.6% in November after a downwardly revised 0.1% decline in October. Analysts attributed the increase to a rebound in car buying and resilient holiday-related spending. Despite the stronger pace, interest-rate markets continued to price the next Federal Reserve cut around mid-2026.
Treasury yields moved modestly lower after the data. The 10-year Treasury yield fell two basis points to 4.16%, while the 2-year yield eased one basis point to 3.52%. The 30-year yield declined two basis points to 4.82%. In currencies, the Bloomberg Dollar Spot Index slipped 0.2%. The euro rose 0.1% to $1.1654, the pound gained 0.2% to $1.3453, and the yen strengthened 0.5% to 158.27 per dollar.
US bank earnings remained a central focus and added to sector volatility. The KBW Bank Index fell 1.6%. Wells Fargo shares dropped about 5% after revenue and net interest income came in slightly below estimates. Bank of America fell 4.4% as investors weighed results against concerns about its expense outlook. Citigroup fell 2.7% in broader trading even as it reported an 84% jump in financial advisory fees, capping a strong year for merger-related revenue.
Geopolitical developments also influenced sentiment. Traders monitored continuing unrest in Iran and watched for the US response, which supported energy prices. West Texas Intermediate crude rose 0.9% to $61.67 a barrel, extending gains after recent advances. Gold rose 0.5% to $4,610.02 an ounce, setting another record as investors sought hedges during heightened uncertainty.
Crypto markets moved higher even as stocks fell. Bitcoin gained 2.5% to $96,442.03, while Ether climbed 4.1% to $3,340.25. Investors also tracked corporate headlines beyond banks, including Tesla’s reported shift to a subscription-only pricing model for its Full Self-Driving package and other earnings-season developments that could influence sector performance in the coming weeks.
Bank of America said equity trading delivered its best fourth quarter as markets swung.
Citigroup reported an 84% jump in advisory fees as annual deal revenue hit a record.
Wells Fargo missed profit estimates as severance costs rose and revenue ran below views.
Tesla will shift Full Self Driving to a monthly subscription and end the one-time option.
Airbnb named a former Meta executive as CTO to support AI work and personalization plans.
Saks Global Enterprises filed for bankruptcy to address losses and reduce its debt burden.
Shell and Exxon Mobil canceled a plan to sell North Sea gas assets to Viaro Energy today.
Biogen said its at-home Alzheimer's drug could improve access and strengthen competition.
Novo Nordisk renewed its search for obesity deals after Pfizer won Metsera last year.
Infosys raised its annual sales outlook as AI and cloud demand improved client spending.
Overall, the session reflected a cautious risk mood, with investors balancing resilient economic data against earnings pressures and geopolitical uncertainty, leaving markets vulnerable to further volatility in the near term.
Also Read: US Stock Market Today: Wall Street Holds Near Records as Investors Weigh CPI Report and Earnings
