U.S. Markets End on a Sombre Note Amid Tech and Banking Sector Slump

U.S. stocks saw a decline, driven by technology shares and banking losses, with the Nasdaq dropping over 1%. A disappointing Q4 profit report from Wells Fargo contributed to a bank index slump. Tech stocks faced pressure amid a Reuters report about Chinese cybersecurity software restrictions. Retail sales exceeded expectations.

On Wednesday, U.S. stocks experienced a downturn led by a notable decline in technology shares, with the Nasdaq falling by more than 1%. Investors shifted their focus towards defensive sectors, while banking stocks continued to slide following mixed quarterly results.

The S&P 500 bank index dropped 2.1%, marking a five-week low. Specifically, Wells Fargo's shares plummeted by 5.1% after failing to meet fourth-quarter profit expectations. Despite Citigroup and Bank of America surpassing Wall Street predictions for Q4 profits, their shares fell by 4.1% and 4.2%, respectively, due to concerns over a proposed cap on credit-card interest rates.

Adding to the financial sector's challenges, technology stocks saw significant losses. The S&P 500 technology sector led the declines, exacerbated by a Reuters report suggesting Chinese authorities ordered companies to cease using cybersecurity software from U.S. and Israeli firms. Meanwhile, retail sales surpassed expectations while interest rates are poised to remain steady in the near term.

(With inputs from agencies.)