Wall Street falls amid investor unease over US-Iran tensions and policy uncertainty, overshadowing solid bank earnings and retail data
NEW YORK: Wall Street stocks fell for a second consecutive session as geopolitical worries overshadowed solid corporate earnings and economic data.
Investors shrugged off generally good results from major banks and a better-than-expected retail sales report, focusing instead on rising tensions between Washington and Tehran.
The S&P 500 closed down 0.5%, with shares of Citigroup, Bank of America, and Wells Fargo all falling decisively despite executives describing US consumers as resilient.
“Investor attitudes are changing,” said Jack Ablin of Cresset Capital Management. “Some negativity is creeping in.”
Ablin cited investor unease over President Donald Trump’s threats to Federal Reserve autonomy and his proposed 10% interest rate cap on credit cards as sources of unpredictability.
There’s “uncertainty around these capricious policies and markets are already expensive,” he added.
Rising rhetoric between the United States and Iran over Tehran’s handling of protests helped propel oil prices about 1.5% higher.
Iran warned the United States it was capable of responding to any attack, as Washington appeared to be pulling personnel from a base previously targeted by Iran.
“Traders are closely watching the political unrest in Iran and possible US intervention, which could threaten disruption to the country’s…oil production,” said Helge Andre Martinsen, senior energy analyst at DNB Carnegie.
In other markets, London’s FTSE 100 set a fresh all-time high thanks to mining stocks, while Frankfurt and Paris slid lower.
Asian markets mostly gained, with Tokyo’s Nikkei jumping 1.5% as the yen slumped to its lowest value since mid-2024.
Reports indicated Japanese Prime Minister Sanae Takaichi, riding high in polls, planned to hold an election as soon as February 8.
Her cabinet has approved a record 122.3-trillion-yen (USD 768 billion) budget for the fiscal year from April 2026 to address inflation.
On the corporate front, British energy giant BP revealed a write-down of up to USD 5 billion linked to its energy transition efforts.
Its share price traded lower for much of the day but closed with a 1.5% gain.
