Wall Street Jitters: Banks' Earnings Warnings and Energy Slump Weigh on Markets

The S&P 500 index saw modest gains Tuesday amid concerns over slowing economic growth and falling bank stocks. Energy shares also fell as crude oil futures declined post OPEC+'s reduced demand forecast. Investor sentiment was impacted by earnings warnings from major banks and uncertainty around the upcoming Federal Reserve decision and presidential election.

The S&P 500 index closed slightly higher on Tuesday as concerns about slowing economic growth affected gains. The Dow dipped as bank stocks fell following warnings of current-quarter weakness and energy shares tumbled due to a drop in crude oil futures after OPEC+ lowered its demand forecast for 2024 and 2025.

Goldman Sachs CEO David Solomon indicated that trading revenue could fall 10% this quarter, leading to a broad decline in bank stocks. JPMorgan Chase also tempered expectations around income from interest payments, while Ally Financial's finance chief noted intensified credit challenges, causing its shares to plummet.

Investor apprehension was further heightened by a plan from the Federal Reserve's regulatory chief to ease an earlier proposal to raise big banks' capital. Concerns were compounded by the impending U.S. presidential election and the Federal Reserve's upcoming decision on interest rates, as well as a televised debate between presidential candidates Kamala Harris and Donald Trump.

(With inputs from agencies.)