Wall Street drops as JPMorgan, Citi, Wells Fargo erase pre-market gains

Wall Street major indexes fell on Friday morning, erasing all their gains coming out of the opening bell as JPMorgan led a sharp reversal in financial stocks.

JPMorgan dropped 1.7 percent after its profit missed estimates as lower investment banking revenue offset gains from higher interest rates and a jump in trading revenue.

Shares of Wells Fargo also shed premarket gains to drop 2.9 percent after the bank said it may have to pay a penalty of $1 billion to resolve investigations.

Citigroup also reversed course to trade 1.8 percent lower after its results.

The S&P 500 banks index was down 1.98 percent.

"A lot of it (earnings expectations) has been baked in and that's is the real critical test for the markets," said Scott Brown, Chief Economist at Raymond James in St. Petersburg, Florida.

"This has not been the typical pre-earnings season where you're talking down expectations. There is some potential for disappointment at the same time there is also lot of hope that these numbers are going to meet expectations."