Your CNN account Log in to your CNN account Along with the upcoming Fed rate hike announcement due Wednesday afternoon, and fears about the debt ceiling, that’s creating a storm of worries on Wall Street, said Dan Eye, chief investment officer at Fort Pitt Capital Group. While CEO Jamie Dimon assured shareholders on a Monday call that the banking tumult has been contained, investors still appear to be skittish. Shares of JPMorgan Chase dropped 1.7% after notching a 2.1% gain on Monday, following its purchase of most of collapsed regional lender First Republic Bank’s assets. Wells Fargo fell 4.7%, Citigroup slipped 3.1% and Bank of America declined 3.9%. The SPDR S&P Regional Banking ETF, which tracks a range of mid-sized banks, dropped about 7%.īig banks weren’t spared. Western Alliance Bank fell about 20.4% and New York Community Bancorp declined about 7%. Shares of PacWest Bancorp tumbled about 26.5%, paring back earlier losses. All three major indexes are on pace to end the week down. The broad-based S&P 500 slid 1.4% and the tech-heavy Nasdaq slipped 1.2%. The Dow fell about 475 points, or 1.4% by midday Tuesday after tumbling nearly 600 points earlier in the session. It helps set rates for mortgages and other important loans.Stocks fell steeply Tuesday as investors grew fearful that turmoil in the banking sector has not been contained, and ahead of a key policy decision from the Federal Reserve. In the bond market, the yield on the 10-year Treasury rose to 3.51% from 3.44% late Friday. Earnings reports will also arrive from Duke Energy, The Walt Disney Co. government will give the latest monthly updates on inflation at the consumer and wholesale levels. Treasury Secretary Janet Yellen said on ABC’s “This Week” on Sunday that there are “no good options” for the United States to avoid an economic “calamity” if Congress fails to raise the nation’s borrowing limit of $31.381 trillion in the coming weeks. Treasurys are seen as the safest possible investment in the world. Such an event would rock financial markets because U.S. The Fed said it’s not sure of its next move, as swaths of the economy have shown sharp slowdowns but the job market remains largely resilient.Īlso hanging over the economy is the threat of a default by the U.S. ![]() High rates do that by slowing the economy and hurting prices for investments, which runs the risk of causing a recession if they stay too high for too long. ![]() The Federal Reserve has lifted its benchmark interest rate to a range of 5%-5.25%, up from virtually zero early last year, in hopes of slowing high inflation. Among the reasons some smaller and mid-sized banks gave for the forecast were wanting to take less risk and worries about deposit outflows. Not only that, the survey suggested banks widely expect to raise their standards over the course of 2023. That in turn could raise the risk of a recession that many investors already see as highly likely.Ī report Monday from the Federal Reserve showed many banks tightened their lending standards during the first three months of the year. The larger concern for markets is that all the turmoil could cause banks to pull back on their lending. Weighed down by much higher interest rates, smaller and mid-sized banks are scrambling to assure Wall Street their deposits are secure and not at risk of seeing a sudden exodus, similar to the runs that toppled Silicon Valley Bank and others. jobs, which calmed worries about a possible recession but raised concerns about high inflation, and fears about smaller and mid-sized banks dominated the previous week. The Dow Jones Industrial Average slipped 0.2% to 33,618.69 while the Nasdaq composite added 0.2% to 12,256.92.Ī strong reading on U.S. On Wall Street, the S&P 500 edged up by less than 0.1% to 4,138.12, coming off its worst week in nearly two months. Asian shares were trading mixed Tuesday as investors took a wait-and-see view on the week ahead, which promises reports on some of the market’s biggest worries, including stubbornly high inflation across the economy. dollar and South Korean won, top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, May 9, 2023. Ahn Young-joon/AP Show More Show Less 2 of5 A currency trader watches monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. ![]() 1 of5 Currency traders work in front of the screens showing the Korea Composite Stock Price Index (KOSPI), top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, May 9, 2023.
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