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It was a risk-off session for stocks on Wednesday, with the three main indexes notching their first back-to-back losses of 2026. Geopolitical worries weighed on sentiment today, while bank stocks continued to tumble after the latest batch of earnings.
Tech stocks took a hit, too, on reports that China issued its latest salvo in the artificial intelligence (AI) chip war.
Market participants sought out safe-haven assets on Wednesday amid reports of increasing tensions between the U.S. and Iran. Massive protests in Iran have resulted in thousands of deaths, prompting President Donald Trump to threaten tariffs on any countries doing business with Tehran.
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Amid these escalating tensions, the U.S. is now evacuating some personnel from the Al Udeid Air Base in Qatar, according to The Wall Street Journal.
While the reports spooked equity investors, gold futures rose 0.8% today to $4,626 per troy ounce. Silver settled up 5.8% at $90.87 per troy ounce.
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Oil prices also got a lift, with West Texas Intermediate crude futures rising 1.4% to settle at $62.02 per barrel.
As for the main indexes, the Dow Jones Industrial Average closed down 0.09% to 49,149, the S&P 500 fell 0.5% to 6,926, and the Nasdaq Composite slumped 1% to 23,471.
Bank stocks drop after earnings
Financial stocks were among the worst performers on Wall Street today despite several large lenders reporting better-than-expected earnings reports.
Bank of America (BAC), for one, fell 3.8% despite its top- and bottom-line beats. “BAC turned in a very solid quarter with the highlight being nearly double-digit growth in net interest income,” says Brian Mulberry, senior client portfolio manager at Zacks Investment Management.
But Mulberry says that expectations were high heading into this morning’s print. Indeed, through its January 13 close, the blue chip stock was up nearly 24% over the past year on a total return basis (price change plus dividends).
Citigroup (C, -3.3%) and Wells Fargo (WFC, -4.6%) also sold off after earnings.
Tech stocks sink on reports of China chip ban
Tech stocks were another pocket of weakness on Wednesday amid reports China is taking steps to ban Nvidia‘s (NVDA) H200 artificial intelligence chips (AI).
According to Reuters, Chinese customs agents are being advised not to allow the AI chips into the country, while regulators are reportedly advising tech companies not to buy the GPUs.
NVDA fell 1.4%, while fellow semiconductor stocks Broadcom (AVGO, -4.2%) and Marvell Technology (MRVL, -2.2%) also tumbled.
Microsoft remains a top stock pick
Microsoft (MSFT), meanwhile, was one of the worst Dow Jones stocks today, sinking 2.4%. Shares are now down 5% for the year to date, but Morgan Stanley analyst Keith Weiss isn’t too worried.
“CIOs expect modest acceleration in software budgets to +3.8% in 2026 (vs 3.7% in 2025), while Microsoft remains in pole position to garner increasing IT Wallet share as GenAI adoption ramps and cloud migrations pick up, with improving Copilot penetration over the next three years,” says Weiss.
He has an Overweight (Buy) rating on the blue chip and says it’s a top stock pick.
UBS sees 20% downside for Rivian stock
Rivian Automotive (RIVN) shed 7.2% after UBS Global Research analyst Joseph Spak downgraded the electric vehicle (EV) maker to Sell from Hold. And while Spak lifted his on the consumer discretionary stock to $15 from $13, the new target is still 20% below its January 13 close.
Heading into Wednesday’s session, RIVN was up 45% in the past six months, which Spak thinks is too far, too fast.
The analyst also believes that the Street’s estimates for revenue growth of 27% in 2026 and 64% in 2027 are too optimistic, and a miss on these lofty expectations could cause the stock to sell off.