US stocks moved lower on Wednesday for a second consecutive session, extending a pullback from recent record highs as investors weighed a fresh batch of corporate earnings alongside delayed economic data that painted a mixed picture of inflation and consumer strength.
The S&P 500 traded 0.5% lower, while the Dow Jones Industrial Average slipped 51 points, or 0.1%.
The tech-heavy Nasdaq Composite underperformed, falling 0.96%, as losses broadened across sectors.
Wednesday’s declines came after US stocks had recently touched record levels, buoyed by optimism around easing inflation, expectations for rate cuts later this year, and enthusiasm surrounding artificial intelligence.
The pullback suggests investors are becoming more selective as earnings season unfolds and valuations remain stretched.
Bank earnings weigh on sentiment
Financial stocks were among the biggest drags on the market after several major banks reported results that failed to impress investors.
Wells Fargo shares fell more than 4% in early trading after the bank posted weaker-than-expected revenue for the fourth quarter.
Bank of America also came under pressure, sliding more than 3%.
The weakness followed a rough session on Tuesday, when Wall Street closed lower, led by a nearly 400-point decline in the Dow.
Financials were the worst-performing group in that session as well, underscoring investor unease around the sector as earnings season gains momentum.
With more major companies set to report results in the coming days, markets are likely to remain volatile as traders assess whether corporate profits can justify current stock prices amid firm producer inflation, a still-resilient consumer, and heightened political risks around monetary policy.
Markets shrug off solid economic data
Stocks fell even as delayed economic releases pointed to a resilient US consumer and persistent inflation pressures at the wholesale level.
Data released Wednesday by the Bureau of Labor Statistics showed that the producer price index for final demand rose 0.2% month over month in November 2025, accelerating slightly from a 0.1% increase in October and matching market expectations.
On a year-over-year basis, headline producer inflation quickened to 3.0%, up from 2.8% previously and above economists’ forecasts of 2.7%.
The release was delayed as federal statistical agencies continue to work through reporting backlogs caused by last year’s prolonged government shutdown.
The pickup in producer prices suggested renewed upstream inflation momentum, even as consumer-level inflation has shown signs of moderation in recent months.
Separate data from the Commerce Department showed that US retail sales rebounded strongly in November, rising 0.6% to $735.9 billion.
That followed a downwardly revised 0.1% decline in October and exceeded expectations for a 0.4% increase among economists surveyed by The Wall Street Journal and Reuters.
The Census Bureau said the retail sales figures were also released later than usual as it continues to clear delays stemming from the 43-day government shutdown, which disrupted data collection late last year.
Fed independence concerns linger
Beyond earnings and data, political pressure on the Federal Reserve remained a source of unease for investors.
President Donald Trump continued his public attacks on Federal Reserve Chair Jerome Powell on Tuesday, amplifying concerns over the central bank’s independence as the Justice Department conducts a criminal investigation into Powell.
The investigation has injected a layer of uncertainty into markets at a time when the Fed is widely expected to pause further interest-rate cuts after easing policy multiple times late last year.
Investors remain sensitive to any developments that could undermine confidence in the Fed’s ability to set monetary policy free from political influence.
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