Stocks tumble, led by U.S. banks

Stocks fell as weakness in shares of U.S. banks and finance firms added to the political and trade tensions weighing on the market. Treasury yields slid and oil rose for a fifth straight day, reaching its highest level since December 2014.

All major U.S. benchmarks ended lower in lighter than normal trading, with the financial sector pacing losses on a drop of more than 1.5 percent.

Wells Fargo & Co. warned that its better than anticipated first-quarter results may change as a settlement with regulators looms, loans dropped and mortgage-banking results trailed predictions.

JPMorgan Chase & Co. and Citigroup Inc. posted quarterly earnings that topped analysts’ expectations, but shares of both companies plunged as JPMorgan Chief Executive Officer Jamie Dimon said, “the environment is intensely competitive and lending was flat for the quarter.”

“You’re getting a very high expectation for earnings season, which makes me a little bit nervous,” said Tom Essaye, the former Merrill Lynch trader who founded market newsletter ‘The Sevens Report.’ After banks reported results “and it wasn’t another positive catalyst, you just saw people come in and sell the market,” he said.

The market’s focus also is on political turmoil surrounding President Donald Trump, military activity in Syria and trade tensions between the U.S. and China. On Thursday, President Donald Trump expressed optimism on trade deal with China.

TPP members leery of Trump

As trade tensions with China escalate, President Donald Trump has found new appeal in a regional trade pact he once called a “rape of our country.”

But officials in Japan, Australia and New Zealand reacted coolly Friday to Trump’s remarks that he would be interested in joining the Trans-Pacific Partnership after rejecting it so publicly. While the United States would significantly bolster the pact if it signed up, its entry would require intense negotiations — and current members will expect significant concessions from the U.S. side.

Yoshihide Suga, Japan’s chief Cabinet secretary, cautioned against any efforts to change it to accommodate Trump.