Wall Street Dips as JPMorgan and Delta Offer Mixed Earnings

Wall Street experienced a decline on Tuesday as the latest earnings season for major U.S. companies began with mixed results. The S&P 500 index fell by 0.4%, while the Dow Jones Industrial Average dropped 399 points, or 0.8%, as of 1:10 p.m. Eastern Time. The Nasdaq Composite also saw a decrease of 0.2%. This downturn follows record highs for both the S&P 500 and the Dow.

U.S. companies are under pressure to deliver robust profit growth for the last quarter of 2025. Analysts predict that the earnings per share for companies in the S&P 500 will rise by 8.3% compared to the previous year, according to data from FactSet. This expectation underscores the need for strong financial performance to justify soaring stock prices.

Mixed Earnings Reports from Major Firms

JPMorgan Chase initiated the earnings season with disappointing results, reporting lower profit and revenue than analysts had anticipated. Its stock fell by 3.8%, contributing significantly to the market’s decline. Some analysts suggested that the shortfall may have stemmed from outdated estimates that did not account for the earnings impact of the bank’s acquisition of the Apple Card credit card portfolio. Despite the earnings miss, CEO Jamie Dimon expressed optimism about the U.S. economy, noting that “consumers continue to spend, and businesses generally remain healthy.”

Delta Air Lines also reported earnings that fell short of expectations, with its stock declining by 3.3%. Although Delta posted a stronger profit than analysts forecasted for the end of 2025, its revenue was below Wall Street’s predictions, as was the midpoint of its profit forecast for 2026.

In another unexpected development, Chipotle Mexican Grill saw its stock drop 3.8% after announcing it is searching for a new chief marketing officer, a move analysts viewed as surprising.

Healthcare Sector Shows Strength

On a more positive note, several healthcare companies demonstrated strong performance after raising their financial forecasts at an industry conference. Moderna led the gains with a remarkable 13.1% increase, following news that it expects to report revenue for 2025 above its previously forecasted midpoint. The company also provided updates on various products, including a seasonal flu vaccine that could receive potential approvals later this year.

Revvity, a life sciences firm, saw its stock rise by 2.4% after announcing it anticipates reporting a profit for 2025 exceeding the upper end of its earlier forecast. Additionally, the company’s revenue forecast for the fourth quarter surpassed analysts’ expectations.

Outside the healthcare sector, L3Harris Technologies experienced a stock increase of 0.4% following its announcement to separate its Missile Solutions business into a standalone entity through an initial public offering (IPO). As part of this plan, the U.S. government agreed to invest $1 billion in the business, which will convert into common stock during the IPO. L3Harris will retain a controlling interest in the Missile Solutions division post-IPO.

In the bond market, yields remained relatively stable after the inflation report released on Tuesday bolstered expectations that the Federal Reserve may consider cutting its main interest rate at least twice in 2026 to support the job market. Lower interest rates could reduce borrowing costs for households and potentially boost investment prices, though they might also exacerbate inflation.

The inflation report indicated that U.S. consumers faced a 2.7% increase in prices last month compared to the previous year, slightly above economists’ expectations and exceeding the Federal Reserve’s 2% inflation target. However, a key underlying inflation trend was less concerning than anticipated, which could provide the Fed with room to lower rates in the future. “We’ve seen this movie before—inflation isn’t reheating, but it remains above target,” stated Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

The data also influenced Treasury yields, with the 10-year Treasury easing to 4.17% from 4.19% late on Monday. The two-year Treasury yield, more closely aligned with Fed expectations, dipped to 3.52% from 3.54%.

Internationally, stock markets displayed mixed results, with Europe and Asia showing varied performance. Japan’s Nikkei 225 index surged by 3.1%, marking one of the largest gains globally, aided by increases in technology-related stocks. Investors are anticipating that Japanese Prime Minister Sanae Takaichi, who took office in October, may leverage her popularity to call a snap election, aiming to strengthen her mandate for increased government spending.

This mixed performance on Wall Street reflects the complex landscape of the current economic environment as companies navigate the challenges of delivering strong earnings amid fluctuating market conditions.