Dow Jones slid by 300 points

On Tuesday, the Dow Jones Industrial Average experienced a decline as investors struggled to maintain the early 2023 momentum and considered the latest earnings results. The blue chip stock index dropped by 303 points, which is equivalent to 0.9%, due to a decrease in shares of Goldman Sachs. In contrast, the S&P 500 and Nasdaq Composite remained relatively stable.

Goldman Sachs saw a decline of 6% following the release of its worst earnings miss in a decade for the fourth quarter. The bank’s results were affected by reductions in investment banking and asset management revenues. In contrast, rival Morgan Stanley released better-than-expected numbers, partly due to record wealth management revenue, causing its shares to increase by 6% and pushing the broad market S&P higher.

These results came after other major banks like JPMorgan and Citigroup reported mixed quarterly results. According to FactSet, 7% of S&P 500 earnings have been reported through Tuesday, with 70% of those companies beating expectations. United Airlines will be releasing its quarterly results after the close of the market.

Wall Street is coming off two positive weeks to start the new year, but investors may be facing a confusing situation, according to Mike Wilson, chief U.S. equity strategist at Morgan Stanley. Year-to-date, the Nasdaq Composite is leading the way with a 5.9% increase, as investors purchased technology shares that were hit hard amid rising hopes for an improved landscape for growth stocks. The S&P 500 and Dow have advanced approximately 4% and 2%, respectively, since the start of the year.

The gains have been driven by the first set of inflation-related data that investors saw as indicating a contracting economy, with hopes that this will give the Federal Reserve justification to slow interest rate hikes once again. Last week, the consumer price index for December showed prices cooled 0.1% from the prior month, but prices were still 6.5% higher than the same month a year ago.