Dow Jones Rises on Bank Earnings, Nasdaq 100 Falls as Tech Stocks Struggle

Wall Street Mixed as Tech Stocks Fall; Banks Lead Gains

U.S. stock indices are putting in a mixed performance on Wednesday, as declines in large-cap technology stocks weighed on the S&P 500 and Nasdaq, while the Dow Jones Industrial Average saw modest gains. A strong performance from banking stocks, buoyed by robust earnings reports, helped balance out the market. Investors showed particular optimism toward financial institutions, which reported solid third-quarter results.

At 16:04 GMT, the Dow Jones Industrial Average is trading 42972.84, up 232.42 or +0.54%. The S&P 500 Index is at 5823.88, up 8.62 or +0.15% and the Nasdaq is trading 18301.09, down 14.50 or -0.08%.

Banks Boost Broader Market

Morgan Stanley led the charge among financial stocks, surging 6.7% after reporting impressive earnings driven by a sharp rise in investment banking revenue. The upbeat performance was echoed across the banking sector, with U.S. Bancorp rising 5% and First Horizon gaining 3.3%, contributing to a 0.7% uptick in the Financials sector. The broader Banks index advanced 1.1%, while regional banks gained 1.3%, reflecting strong support for financials amid better-than-expected earnings reports.

This rally in financials provided essential support to the market, mitigating the downward pressure from the technology sector. Traders appear increasingly bullish on banks, especially as investment banking and consumer activity show resilience amid economic uncertainties.

Tech Sector Drags on Nasdaq and S&P 500

Mega-cap technology stocks faced a sell-off, pushing the Nasdaq and S&P 500 into the red. Apple, which had hit a record high the previous day, dropped 1.4%, while Microsoft fell 1.3%. Communication Services was another weak spot, with Meta Platforms down 1.5%, dragging the sector 0.7% lower.

Among chipmakers, Nvidia rebounded 0.5% after a sharp decline in the prior session. However, ASML Holding slumped 5.3% after cutting its financial forecast for 2025, and Intel saw a 3.3% loss following reports that the Cybersecurity Association of China would review its products.

Small-Cap Stocks Outperform

The small-cap Russell 2000 index outperformed the broader market, rising 0.83%. Analysts pointed to a broadening in market participation, with small-cap stocks benefiting from lower interest rates and improving balance sheets. This divergence from the megacap tech-heavy indices suggests that investors are finding opportunities in less expensive, smaller companies.

Outlook and Market Forecast

With bank earnings providing strong support, the short-term market outlook remains cautiously bullish. However, the continued weakness in tech stocks could limit gains across the broader market. Upcoming economic data, including retail sales and industrial production reports, will be key to assessing consumer strength and future growth.

Additionally, rising bets on a potential 25-basis-point rate cut by the Federal Reserve could add momentum to equities, particularly in financial and industrial sectors. Traders should monitor bank earnings closely, as they may continue to drive market performance in the near term.