U.S. stock markets fell on Wednesday as investors digested fresh bank earnings, economic reports, and rising geopolitical tensions, particularly involving Iran. The drop marked a continuation of a recent pullback after Wall Street hit record highs.

Major Indexes Take a Hit

The Nasdaq Composite, heavily weighted with tech companies, led the decline, dropping about 1.4%. The S&P 500 slipped nearly 1%, while the Dow Jones Industrial Average fell around 0.6%, following earlier weakness in financial stocks.

Tech giants faced significant pressure, with Nvidia (NVDA) sliding despite U.S. approval for some chip exports to China, as reports of potential restrictions emerged. Tesla (TSLA) and Broadcom (AVGO) also recorded notable losses, highlighting ongoing investor caution in the tech sector.

Geopolitical Tensions Boost Oil Prices

Rising fears of U.S. action against Iran added to market uncertainty. President Trump intensified military threats after a deadly crackdown on public protests in Iran. This spurred oil prices to a two-month high, as Iran warned it would retaliate against any U.S. strikes, while Washington pulled some personnel from regional bases.

Bank Earnings: Strong Profits, Mixed Reactions

Quarterly earnings from major banks painted a mixed picture. Bank of America (BAC) and Wells Fargo (WFC) reported strong profits thanks to increased trading activity, yet their stocks fell alongside Citigroup (C). This mirrors the weak start to earnings season, which began with JPMorgan Chase (JPM) reporting underwhelming results.

Despite solid numbers, investors remain cautious, reflecting concerns over future economic conditions and regulatory risks.

Economic Data Suggest Fed May Hold Rates

On the macroeconomic front, wholesale inflation data came in muted, following Tuesday’s soft consumer inflation report. This combination strengthened expectations that the Federal Reserve may keep interest rates steady in January.

Additionally, retail sales for November exceeded forecasts, even with delays caused by the government shutdown. These figures suggest steady consumer spending, offering some support to the broader economy.

Precious Metals Surge Amid Uncertainty

Uncertainty in global markets and expectations for continued Fed support fueled a rally in gold and silver. Silver briefly surpassed $90 per ounce, reaching record highs, while gold also climbed. Investors are using precious metals as a hedge against both geopolitical tensions and potential policy missteps.

Market Watch: Supreme Court and Trade Tariffs

Markets are also keeping an eye on the Supreme Court, which again declined to rule on a legal challenge over President Trump’s authority to set tariffs. Trump has framed the case as a national security issue, saying that a negative ruling could have serious implications.

Analyst Insight

Wednesday’s market moves reflect a blend of corporate, economic, and geopolitical factors. While bank profits are strong, tech sector vulnerability and global tensions are driving volatility. Traders are balancing optimism from consumer spending with caution over international developments.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.