S&P 500 declines Thursday, heads for losing week amid big earnings, high inflation

Stock futures were little changed Thursday morning as investors digested mixed earnings results from major banks.

Dow Jones Industrial Average futures rose 54 points, or 0.15%. S&P 500 futures dipped 0.1%, while Nasdaq 100 futures were flat.

Major banks including Goldman Sachs, Morgan Stanley and Wells Fargo posted their first-quarter earnings on Thursday. Investors are monitoring how banks weathered surging inflation and a recession warning from the bond market in the form of the flattening yield curve.

Goldman Sachs‘ stock price jumped nearly 2% after beating first-quarter earnings expectations. Goldman reported $10.76 earnings per share and $12.93 billion revenues. Analysts polled by Refinitiv were expecting earnings per share of $8.89 and revenues of $11.83 billion.

Shares for Morgan Stanley popped more than 2% after the bank reported an earnings beat. The firm earned $2.02 per share and revenues of $14.8 billion. In comparison, Morgan Stanley was expected to report $1.68 a share and revenues of $14.2 billion, according to consensus estimates from Refinitiv.

Shares for Citigroup jumped 3% after the company topped earnings estimates with better-than-expected trading revenue. The firm reported earnings of $2.02 per diluted share, versus the Refinitiv estimate of $1.55 a share. It also gained $19.19 billion, compared to the Refinitiv estimate of $18.15 billion.

On the other hand, shares for Wells Fargo dipped 2.6% in premarket trading Thursday after the bank posted first-quarter revenue that fell short of analyst estimates and said credit losses were likely to increase.

Investors are watching how companies navigated the first quarter as earnings season goes into full swing next week. Bank of America is expected to report before the bell Monday. Airline companies American Airlines and United Airlines are reporting earnings following Delta‘s positive forecast this week. IBM, Lockheed Martin, Netflix and Tesla will also round out a stacked week.

Twitter shares popped in premarket trading Thursday after Elon Musk offered to buy the social media company for $54.20 a share. Musk said this was his best and final offer for Twitter, which he said needs to be transformed privately in order to thrive.

JPMorgan shares lost more than 3% on Wednesday, kicking off major bank earnings after the company posted a $902 million charge for building credit reserves for anticipated loan losses, and $524 million in losses tied to Russia-linked market upheaval.

Still, there was some good news for JPMorgan. The company’s trading desks managed to take advantage of volatile markets created by the Ukraine conflict: The bank’s fixed income and equities operations posted about $1.3 billion more in revenue than analysts had expected.

“The bar is low for bank earnings with expectations for Q1 earnings declining about 1%,” said Stephanie Lang, chief investment officer at Homrich Berg. “Beating this low bar could move shares higher with the bright spot being net interest income as interest rates have moved higher.”

Retail sales figures for March slightly missed analyst expectations with a 0.5% gain, according to the U.S. Census Bureau. That’s compared to the 0.6% consensus estimate from Dow Jones.

IBM shares gained 2% in premarket trading after Morgan Stanley upgraded the old technology company, saying it was a “place to hide” amid growing economic uncertainty because of its resilient cybersecurity and analytics business.

U.S. Bancorp, PNC Financial and Ally Financial are also scheduled to report earnings Thursday.

Jobless claims jumped 185,000 for the week ending April 9, according to data from the Labor Department.

In regular trading Wednesday, the Dow advanced about 344 points, or 1% as earnings season got underway with results from Delta and JPMorgan Chase. The S&P 500 and Nasdaq Composite rose 1% and 2%, respectively, each snapping a three-day losing streak.

Wednesday’s market reversal came after an initial batch of quarterly results from companies including Delta, Fastenal and and BlackRock, which came in better than expected. Investors have been eager to see how well companies have managed mounting inflationary pressures.

Still, the S&P 500 is down 0.9% for the week on inflation fears as a Tuesday CPI report showed price increases not seen since 1981. The Nasdaq Composite is off by 0.5% and the Dow is down 0.5% on the week. Trading is closed at the NYSE on Friday.

CNBC’s Hugh Son contributed reporting.

Correction: Wells Fargo decreased its allowance for credit losses by $1.1 billion. An earlier version said it had set aside more money for credit losses.

Investors digested major bank earnings results from Goldman Sachs, Morgan Stanley and others.