Wall Street edges back from its records as JPMorgan Chase and Delta kick off earnings season

By STAN CHOE, Associated Press Business Writer

NEW YORK (AP) — U.S. stock indexes are edging back from their records on Tuesday following a mixed start to the latest profit reporting season for big U.S. companies. An update on inflation is meanwhile giving Wall Street little momentum, either upward or downward, after coming in close to expectations.

The S&P 500 slipped 0.3% after drifting earlier between small gains and losses. The Dow Jones Industrial Average was down 343 points, or 0.7%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.2% lower. Both the S&P 500 and Dow are coming off all-time highs.

Yields also eased in the bond market after the inflation data strengthened expectations that the Federal Reserve may be able to cut its main interest rate at least twice further in 2026 to shore up the job market.

Lower interest rates could make borrowing cheaper for U.S. households and boost prices for investments, but they could also worsen inflation at the same time. Tuesday’s report showed that U.S. consumers paid prices last month for gasoline, food and other costs of living that were 2.7% higher overall than a year earlier. That’s a touch worse than economists expected and above the Fed’s 2% target for inflation.

But, more encouragingly, an important underlying trend of inflation wasn’t as bad last month as economists expected. That could give the Fed more leeway to lower interest rates later.

“We’ve seen this movie before—inflation isn’t reheating, but it remains above target,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

Also helping to keep Wall Street relatively quiet were mixed profit reports from big U.S. companies. They’ll need to deliver strong growth to justify their stock prices’ record-breaking runs, and analysts expect companies in the S&P 500 to deliver earnings per share that are 8.3% higher than a year earlier, according to FactSet.

JPMorgan Chase helped kick off the latest reporting season by delivering weaker profit and revenue for the end of 2025 than analysts expected. But that may have been partly because some analysts were not expecting the bank to take a one-time hit to its earnings due to its purchase of the Apple Card credit card portfolio.

CEO Jamie Dimon sounded relatively optimistic about the U.S. economy, saying “consumers continue to spend, and businesses generally remain healthy.” Its stock fell 2.8%.

Delta Air Lines, meanwhile, lost 1.5% despite reporting a stronger profit for the end of 2025 than analysts expected. Its revenue came up short of Wall Street’s expectations, as did the midpoint of its forecasted range for profit in 2026.

Chipotle Mexican Grill fell 3.5% after saying it’s looking for a new chief marketing officer, a move that analysts said was a surprise.

On the winning side of Wall Street was Revvity, which jumped 7.5% for one of the biggest gains in the S&P 500. The life sciences company said it expects to report profit for the full year of 2025 that’s above the top end of the forecasted range it had given in October. Its forecast for revenue in the fourth quarter also topped analysts’ expectations.

Cardinal Health rose 3.9% after it also used a health care conference as an opportunity to raise financial forecasts. The company said it expects to earn at least $10 in adjusted earnings per share in its fiscal 2026 year, up from its prior forecasted range of $9.65 to $9.85.

Outside of health care, L3Harris rose 1.9% after defense company said it’s planning to break off its Missile Solutions business into a separate company through an initial public offering. As part of the plan, the U.S. government agreed to invest $1 billion in the business, which will convert into common stock following its IPO.

L3 Harris will keep a controlling interest in the missile business following the IPO.

In stock markets abroad, indexes were mixed in Europe and Asia.

Japan’s Nikkei 225 soared 3.1% for one of the world’s biggest moves and set a record, thanks in part to gains for technology-related stocks.

In the bond market, the 10-year Treasury eased to 4.16% from 4.19% late Monday. The two-year Treasury yield, which more closely tracks expectations for what the Fed will do, inched down to 3.53% from 3.54%.

AP Business Writers Chan Ho-him and Matt Ott contributed.