U.S. stocks fell from record levels in volatile trading on Wednesday amid a sell-off in technology shares, while investors digested the first batch of corporate earnings that largely exceeded expectations.
The S&P 500 dipped 0.5% after hitting a fresh record earlier in the session. The Dow Jones Industrial Average gained 40 points. The 30-stock benchmark climbed more than 200 points at one point to touch an all-time high. The Nasdaq Composite traded 1% lower.
Coinbase’s widely watched direct listing on Wednesday opened at $381 on the Nasdaq and shot up as high as $429, but soon dipped below the debut price. As Coinbase shares traded off their highs, the price of bitcoin also fell from a record high of more than $63,800 hit earlier on Wednesday. Crypto investors were hailing the company’s stock market debut as a major milestone for the industry after years of skepticism from Wall Street and regulators.
Tesla, a holder of bitcoin and speculative tech play, fell more than 3%. Big Tech stocks including Amazon, Facebook, Netflix and Apple all traded at least 1% lower.
Strong bank earnings helped support sentiment on Wednesday. Shares of Goldman Sachs climbed more than 3% after the bank blew past analysts’ expectations with record first-quarter net profits and revenues on strong performance from the firm’s equities trading and investment banking units.
JPMorgan Chase beat analysts’ estimates on the top and bottom lines, helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop. Shares of JPMorgan dipped about 1%.
Wells Fargo also reported earnings and revenue that exceeded expectations for its first quarter. The stock gained 5%.
“The first wave of Q1 big bank results look pretty much as strong as most analysts had expected – even stronger actually,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s possible that we’re in a powerful market that’s in a forgiving mood when it comes to bad news. The path of least resistance for stocks continues to seem to be to go higher, with the market climbing a wall of worries that just doesn’t go away.”
Bank stocks have risen sharply so far this year, with the S&P 500 financials sector gaining nearly 20%, easily outpacing the S&P 500.
In other news, Federal Reserve Chair Jerome Powell on Wednesday said the central bank will reduce its bond purchases likely well before it hikes interest rates.
“We will reach the time at which we will taper asset purchases when we have made substantial further progress towards our goals from last December,” Powell said to the Economic Club of Washington. “That would in all likelihood be before, well before, the time we would consider raising interest rates. We have not voted on that order but that is the sense of the guidance.”
On Tuesday, the Food and Drug Administration called for a pause in administering J&J’s Covid-19 vaccine after six people in the U.S. developed a rare disorder involving blood clots. The announcement triggered a sell-off in reopening plays like airlines and cruise line operators.
Pfizer CEO Albert Bourla said the drugmaker can deliver 10% more vaccine doses to the U.S. by the end of May than previously expected. Plus, Moderna said its Covid-19 vaccine was more than 90% effective at protecting against the virus six months after a person’s second shot.
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