Wall Street experienced a downturn as major bank earnings were released, with midcap and smallcap indexes outperforming the S&P 500 in 2026. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw declines, with the Dow falling 0.17%, the S&P 500 0.43%, and the Nasdaq 0.68%. This follows a 25% surge in bank stocks over the past year. The sector's drop of 0.4% was attributed to slight misses on profit estimates, despite strong run-ups into the reports. Analysts predict an 8.8% average fourth-quarter earnings growth for S&P 500 companies, boosting full-year 2025 expansion to 13.2%. The market's record rally is broadening, with S&P 400 midcaps and S&P 600 smallcaps outperforming the S&P 500. The energy index climbed due to supply disruption concerns in Iran, while the consumer discretionary sector fell. Netflix showed a 0.5% increase after considering an all-cash bid for Warner Bros Discovery's studios and streaming assets. The market's performance was influenced by retail sales and producer prices data, with traders pricing in potential interest rate cuts before year-end. The U.S. Supreme Court's rulings on President Trump's global tariffs are also pending, adding to market volatility.
