THE GIST (“THE WHAT”)
Financials and Energy stocks led the S&P 500 index lower for the fourth session in a row, closing a choppy session at 4061.23, down 29.51 points (-0.72%). Investors digested Fed’s 10th consecutive rate hike this cycle, alongside Powell’s comments that a pause in the hiking cycle might be too soon to be expected as inflation remains their chief concern. Tightening credit conditions, growing recessionary risks and lack of clarity around U.S. debt ceiling remains major overhangs on market sentiment.
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THE DETAILS (The “How & Why”):
Nervousness around the deteriorating health of regional banking system continued to hammer regional bank stocks today. Reports of a potential sale of PacWest Bancorp sent the bank stock plunging 51%. Western Alliance Bancorp also hit record lows, down 38% on reports that it was also considering a potential sale. First Horizon Corp was another regional bank to sink more than 33% following reports that it is terminating its agreement to merge with TD Bank.
Qualcomm Inc slipped 5.54% after this major supplier to the smartphone industry released weaker-than-expected guidance due to falling smartphone demand. Paramount Global was another big loser of the session, nosediving 28.35% on missing revenue and earnings estimates and cutting dividends. Other streaming companies also traded lower amid concerns of mounting streaming costs.
Meanwhile, treasury yields were lower, with the 2-year and 10-year yield curve now inverted the most in over six months, signaling recession. Oil prices, however attempted to stabilize after a massive decline last 2 sessions.