On Wednesday, U.S. stock index futures fell more than 1% as investors anticipated economic data for any hints regarding the Federal Reserve’s plans for monetary tightening amid worries about a financial crisis.
new concerns regarding Swiss bank As its top investor declared it couldn’t give the lender any further financial support, Credit Suisse’s U.S.-listed shares fell 21.9% and were poised to open at a record low, hurting investor confidence.
Assurances and emergency steps by U.S. authorities have allayed some concerns about the health of the other banks after the collapse of SVB Financial and rival Signature Bank (NASDAQ:SBNY), aiding regional lenders in staging a recovery in the previous session.
On Wednesday, regional banks, led by First Republic Bank (NYSE:FRC), erased early gains in premarket trade. Peers PacWest Bank and Western Alliance (NYSE:WAL) Bancorp experienced declines of 0.4% and 6.0%, respectively.
Large U.S. financial institutions, including JPMorgan Chase & Co. (NYSE:JPM), Citigroup (NYSE:C), and Bank of America Corp. (NYSE:BAC) had declines of 1.2% to 2.3%.
“The Fed will likely be forced to stop hiking rates in March due to the most recent banking crisis. The Fed must wait before monitoring the effects of the most recent banking crisis, putting the fight against inflation on hold for the time being “Peter Cardillo, head of market analysis at Spartan Capital Securities, said.
The Silicon Valley Bank and Signature Bank issues are partially related to the prolonged battle against inflation; as a result, there will be growing doubts about the stability of the U.S. financial substructure.
Treasury yields on U.S. debt decreased on Wednesday as traders increased their bets that the Federal Reserve will hold off on raising interest rates in March from 15% to 40%.
After a highly anticipated inflation report revealed a slowdown in the growth of February consumer prices, Wall Street surged the previous session, raising hopes for a lesser rate hike after the Federal Reserve’s meeting on March 22.
Investors are anticipating new inflation data that will be released at 8:30 a.m. ET. This report is anticipated to show that producer price rise moderated in February on both a monthly and annual basis.
Retail sales data for February is also due at the same time, expected to show a 0.3% contraction year-on-year in February from 3% growth last month.
At 7:04 a.m. ET, the Nasdaq 100 e-minis were down 162 points, or 1.33%, the S&P 500 e-minis were down 63 points, and the Dow e-minis were down 517 points, or 1.61%.
A day after the chief executive of Charles Schwab (NYSE:SCHW) Corp indicated the bank and brokerage have ample liquidity and are not looking for capital or transactions, shares of the company dipped 0.6% premarket.