Big Bank Stocks Stumble After Earnings Missteps

What You Need to Know

Wells Fargo headed for its worst earnings-day drop Friday in more than three years after its net interest income missed estimates.
Citigroup is among the 10 worst performers in the S&P, sinking as much as 3.6%.
Bank of America, Goldman Sachs and Morgan Stanley will be in focus early next week.

The biggest U.S. bank stocks have been trouncing the broader market this year, but the rally got a brake-check from results that underwhelmed investors.

Wells Fargo & Co. is heading for its worst earnings-day drop in more than three years after its net interest income miss. Citigroup Inc. slumped as expenses were in focus, even though its markets revenue beat expectations.

Meanwhile, JPMorgan Chase & Co., which sank the most in a month after its results and steady guidance failed to impress, is reclaiming part of that early decline.

In short, the results were not enough to keep the momentum going after rallies had sent all the stocks up by more than 20% this year through Thursday’s close, compared with the S&P 500 Index’s 17% gain. The moves are particularly stark given the broader market is rising on Friday, with roughly 425 S&P stocks in the green.

“All three of the reporters today had been up significantly on a year-to-date basis,” said Art Hogan, chief market strategist at B. Riley Wealth. Being up so much “certainly puts you in a place where you’re priced-to-perfection.”

All three stocks had finished lower after their first-quarter results, showing how earnings are increasingly a tripping hazard for the sector as valuations have risen.

Wells Fargo is the worst-performing stock in the S&P 500 for the session, with shares dropping as much as 7.6%, their biggest intraday decline since March 2023.