Wall Street ends lower, led by drop in Nasdaq, with tech, banks falling

Core Viewpoint - U.S. stocks finished lower, led by declines in technology shares and bank stocks, despite some banks beating quarterly profit estimates. Concerns over a proposed cap on credit-card interest rates have negatively impacted financial sector sentiment [1][9]. Financial Sector - Citigroup and Bank of America shares fell despite beating Wall Street estimates for fourth-quarter profit. The S&P 500 bank index dropped, with Wells Fargo down 4.6% after missing profit expectations [1][9]. - Financials, which had seen significant gains in 2025, have declined this week due to concerns over President Trump's proposed credit-card interest rate cap, which could squeeze consumers and hurt profits in the financial sector [1][9]. - Michael O'Rourke, chief market strategist at JonesTrading, noted that profit-taking and consolidation are occurring in the banks after a strong run, but overall optimism remains [2]. Technology Sector - The S&P 500 technology sector also fell, as investors shifted focus from expensive megacap stocks to value and more defensive names [2][9]. - Shares of Broadcom and Fortinet dropped following reports that Chinese authorities instructed domestic companies to stop using cybersecurity software from U.S. and Israeli firms [5][10]. Market Performance - The Dow Jones Industrial Average fell by 42.36 points (0.09%) to 49,149.63, the S&P 500 lost 37.14 points (0.53%) to 6,926.60, and the Nasdaq Composite decreased by 238.12 points (1.00%) to 23,471.75 [5][9]. - The small-cap Russell 2000 index reached a record closing high, along with the S&P 500 industrials index, indicating strong performance in certain sectors [4][9]. Economic Indicators - U.S. producer prices matched forecasts in November, while retail sales exceeded expectations. Consumer prices in December rose as projected [6][10]. - Interest rates are expected to remain steady through the first half of the year, with traders anticipating at least two cuts before year-end [7][10]. Trading Volume - Trading volume on U.S. exchanges was 22.54 billion shares, significantly higher than the 16.69 billion average over the last 20 trading days. Advancing issues outnumbered decliners by a 1.85-to-1 ratio on the NYSE [8][10].