US midday market brief: S&P 500 retreats 1.1% as traders weigh earnings, geopolitics

US equity markets stumbled midday for the second consecutive session on Wednesday, with major indices retreating from their recent record highs as investors grappled with disappointing corporate earnings guidance.

Moreover, escalating geopolitical tensions in Iran and an unexpected delay in the Supreme Court’s ruling on Trump’s tariffs also weighed on the sentiment.

The S&P 500 dropped roughly 1.1%, the Nasdaq fell 1.6%, and the Dow Jones Industrial Average shed 333 points, erasing early gains and signaling growing caution.​

US stocks midday: Market snapshot and sector movers

The broad selloff reflected a shift in market sentiment.

Tech stocks bore the brunt of the decline, with semiconductor heavyweights like Nvidia, Broadcom, and Arm Holdings each falling 2% or more as investors worried about China supply disruptions amid rising geopolitical tensions.

The financial sector, despite mixed earnings results from major banks, also stumbled.

Bank of America reported a quarterly profit of $0.98 per share, beating analyst expectations, yet shares fell roughly 5% over concerns about future net interest income guidance.

Wells Fargo’s stock declined after the bank missed on fourth-quarter revenue and disappointed on net interest income projections due to severance costs from workforce reductions.​

Consumer staples, utilities, and healthcare outperformed. Energy and materials gained ground as oil prices and precious metals rallied on geopolitical anxiety.

The session marked the second loss in a row after markets had achieved record highs just days earlier.

Why investors pulled back?

The earnings backdrop set a high bar for corporate America.

Investors, spooked by elevated valuations and uncertain economic conditions, are demanding not just beats but compelling forward guidance.

Bank earnings opened the season on a mixed note: some companies beat on profitability but cautioned on future revenue growth, a pattern that weighed on bank stocks overall.​

The more immediate trigger for today’s decline, however, was geopolitical escalation in Iran.

President Trump announced a 25% tariff on any nation conducting business with Iran and escalated military rhetoric, suggesting potential US intervention in civil unrest there.

The market responded by pricing in oil-supply disruption risk.

Brent crude surged to nearly $65 per barrel, the highest since mid-November, after gaining 9% over the previous four trading sessions.

West Texas Intermediate crude climbed to $60.60 per barrel.

Analysts estimate that roughly $3 to $4 per barrel of the current oil price is driven by what’s known as “geopolitical risk premium,” reflecting the possibility that Iranian crude exports could be disrupted.​

The risk-off sentiment extended beyond oil.

Gold and silver prices reached record levels as investors sought traditional safe havens. Bond prices rallied, pushing the 10-year Treasury yield down 4 basis points.

Investors were also purchasing protection via put options and hedges, a sign of heightened unease.​

Adding to the market’s jitters, the Supreme Court unexpectedly postponed its ruling on the constitutionality of Trump’s tariffs.

The decision could reshape trade policy and carry implications for hundreds of billions of dollars in potential refunds if the court strikes down his tariff authority.

The uncertainty left traders in limbo and investors with one fewer catalyst for clarity.

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