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Treasury Yields and Stock Indexes Plunge as Fed Rate Hike Odds Fall


The 10-year Treasury yield tumbled 21 basis points to 3.48% last week, while the 2-year Treasury yield plunged 50 basis points to 4.9%, as Fed rate hike odds fall. The 10-year Treasury yield trended down 0.074 percentage points at 3.56%, and the 2-year yield was down 5 basis points at 4.17%. Bond yields fell and the major stock indexes were down significantly. The Dow Jones Industrial Average fell 1.6%, or more than 500 points, the S&P 500 plunged 1.4%, and the Nasdaq Composite dropped 1%.[0]

First Republic Bank (NYSE:FRC) stock crashed more than 60% Monday morning, even after saying it got fresh funding from the Federal Reserve and JPMorgan.[0] The Western Alliance has seen a drop of more than 60%.[1] In spite of a Citigroup upgrade, Schwab dropped by 6%.[1] Despite receiving an upgrade from Wells Fargo on Friday, JPMorgan Chase (JPM) dropped 1%.[1] BAC (Bank of America) dropped 3%.[1] The XLF financial ETF experienced a slight decrease, whereas the KRE regional bank ETF experienced a large drop.[1]

At 6:45 P.M. Eastern Time (10:45 P.M. Greenwich Mean Time), futures of the Dow Jones, Nasdaq 100, and S&P 500 all dropped slightly,[2]

UMB, based in Kansas City, has the highest local market share of any regional or national bank in the metro area.[3] Amid a collection of regional banks across the nation that experienced a notable drop in their share prices, the federal government sought to restore faith in the American banking system.[3]

On Tuesday, traders were active on the floor of the New York Stock Exchange in New York City.[4] On Wednesday, stock prices plummeted due to concerns that apprehensions about the banking sector were escalating to other parts of the globe.[5]

The Producer Price Inflation report for February will be released by the Bureau of Labor Statistics.[6] It is anticipated that the month-on-month rise in wholesale prices will be 0.3%, which is more sluggish than January’s 0.7% increase.[6] It is predicted that the yearly rate will diminish from 6% to 5.4%.[6] It is anticipated that the core Personal Price Index (PPI) will increase by 0.4% from the month of January, when it grew by 0.5%, and the yearly rate could have declined from 5.4% to 5[6]

The 10-year Treasury yield, 2-year Treasury yield, and major stock indexes all saw significant drops this week.

0. “S&P 500 off lows, but Credit Suisse-led distress in banks weighs By Investing.com” Investing.com, 15 Mar. 2023, https://www.investing.com/news/stock-market-news/sp-500-off-lows-but-credit-suisseled-distress-in-banks-weigh-3031534

1. “What To Do As S&P 500 Breaks Final Support; Watch JPMorgan, These Stocks | Investor’s Business Daily” Investor’s Business Daily, 12 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/what-to-do-as-sp-500-breaks-final-support-watch-jpmorgan-these-bank-stocks/

2. “Dow Jones futures fall 600 points following international bank shares’ sharp decline” Washington Examiner, 15 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/dow-jones-futures-fall-international-bank-shares-decline

3. “UMB, Kansas City’s largest bank, sees stock plunge following Silicon Valley collapse” Kansas City Star, 13 Mar. 2023, https://www.kansascity.com/news/business/article273090520.html

4. “Credit Suisse, Citi and more bank stocks tumble amid Silicon Valley Bank turmoil” ABC News, 15 Mar. 2023, https://abcnews.go.com/Business/bank-stocks-tumble-amid-silicon-valley-bank-turmoil/story?id=97878825

5. “U.S. stocks drop on worries about Credit Suisse, global banking” NPR, 15 Mar. 2023, https://www.npr.org/2023/03/15/1163640413/credit-suiss-banks-silicon-valley-bank-signature-bank

6. “Nasdaq, S&P Futures Plunge As Credit Suisse Crisis Deepens, Bringing Banks Back In Spotlight – Invesco QQ” Benzinga, 15 Mar. 2023, https://www.benzinga.com/news/earnings/23/03/31356855/nasdaq-s-p-futures-plunge-as-credit-suisse-crisis-deepens-bringing-banks-back-in-spotlight

Forecast Future Price Action
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