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Wall Street ends lower as mixed economic data confirms Fed rate hike expectations

On Friday, Wall Street closed lower after a mixed bag of economic data came out. Investors became less excited about the market due to the possibility of another Federal Reserve interest rate hike. This followed a week of strong earnings reports from major US banks.

All three major US stock indexes ended the day in the red, but they did make gains throughout the week after Thursday’s rally. The banking sector saw a 3.5% increase in the S&P 500, with Citigroup Inc, JPMorgan Chase & Co, and Wells Fargo & Co all reporting better-than-expected earnings. This was largely due to rising interest rates, and the banking industry appears to be in good health overall.

However, mixed economic data was released, including retail sales, industrial production, and consumer sentiment. This has led to expectations of another 25 basis point hike at the next Federal Reserve policy meeting. Atlanta Fed President Raphael Bostic has said that another rate hike could end the Fed’s tightening cycle, but other experts have called for prudence.

Financial markets are currently pricing in a 74% likelihood of another rate hike. The Dow Jones Industrial Average fell 143.22 points, or 0.42%, to 33,886.47; the S&P 500 lost 8.58 points, or 0.21%, at 4,137.64; and the Nasdaq Composite dropped 42.81 points, or 0.35%, to 12,123.47.

The S&P 500 is now gearing up for the first-quarter earnings season, with results expected from high-profile companies like Goldman Sachs Group Inc, Morgan Stanley, Bank of America Corp, and Netflix Inc, among others. Expectations have been lowered, with analysts forecasting that aggregate S&P 500 earnings have fallen by 4.8% from a year ago. However, BlackRock Inc beat quarterly profit expectations, rising by 3.1%.

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