JPMorgan, the largest US bank by assets, beat profit estimates but interest margin slipped, triggering concerns of lower interest rates hurting bank profits, a day after Citigroup Inc reported a similar drop.
JPM shares were marginally higher in volatile trade after slipping as much as 1pc during the session. The S&P banking index was down 0.23pc.
Goldman Sachs rose 2.4pc and Wells Fargo gained 0.5pc after the banks reported quarterly profit that topped estimates.
"Investors are closely watching whether the changing interest rate environment will impact net interest income guidance," said Jason Benowitz, senior portfolio manager at the Roosevelt Investment Group Inc in New York.
Hopes of an interest rate cut by the Federal Reserve as early as this month to cushion the economy from any slowdown due to trade tensions have helped Wall Street's three main indexes scale fresh record highs in July.
As earnings season gathers steam this week, investors will be closely watching for indications of how a protracted US-China trade war has hurt the quarterly profits and forecasts of companies.
Profit at S&P 500 companies is likely to dip 0.3pc, which would be the first quarterly drop in three years, according to Refinitiv IBES data.
"We're going to need extraordinarily good news in order to keep the market rallying at a fast pace. It will be really difficult to do that until we get into the full earnings season," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. J.B. Hunt Transport Services Inc jumped 8.9pc, the most among S&P 500 companies, after the transport and logistics provider posted strong quarterly performance in its second biggest unit DCS.
The gains also boosted the Dow Jones transport index 2.15pc higher.
At 9:54 a.m. ET the Dow Jones Industrial Average was up 6.28 points, or 0.02pc, at 27,365.44, the S&P 500 was down 1.60 points, or 0.05pc, at 3,012.70 and the Nasdaq Composite was down 4.54 points, or 0.05pc, at 8,253.64.
Dow Industrials member Johnson & Johnson hiked its full-year operational sales forecast as strong demand for its cancer drugs Darzalex and Imbruvica. Its shares fell 1.4pc .
Economic data was a bright spot. A Commerce Department report showed retail sales increased more than expected in June, while a Federal Reserve report showed US manufacturing output accelerated in June, climbing for the second straight month.
"It's important that we get macro news that suggests we're not heading towards a recession due to the trade war," Cardillo said.
Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE and for a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and one new lows, while the Nasdaq recorded 38 new highs and 30 new lows.