Supply chain problems and higher costs for energy and other things have fueled concern about earnings, set to kick off with JPMorgan Chase results on Wednesday.
Indexes reversed early gains, and JPMorgan shares were down and among the biggest drags on the S&P 500, while the S&P financial index was also lower.
The S&P 500 lost 0.70 percent to 4,361, while the Nasdaq Composite lost 0.6 percent to 14,486. The Dow Jones Industrial Average fell 0.7 percent to 34,496.
“I was surprised to see the market up this morning because earnings season is right ahead of us, and the market is a bit cautious going into this earnings season,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“Supply chain issues may have impacted earnings for a number of companies and certain industries more than others.”
Another period of strong US profit growth is forecast as third-quarter reports from Corporate America flow in starting next week, with analysts expecting a 29.6 percent year-over-year increase in profit for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday.
But earnings are shaping up to be crucial for investors worried about the impact of supply disruptions and inflation pressures on US companies, and could lead to more volatility on Wall Street following a bruising September.
Energy was also lower after hitting its highest since January 2020. Higher oil prices have fed into concerns about rising costs for businesses and consumers.
Some trading may have been affected by the US Columbus Day holiday, with US bond markets shut on Monday. (Reuters)