The New York Dow Jones Stock Exchange ended lower on Tuesday (May 2), as markets were weighed down by concerns about a crisis in the US banking sector. Including concerns that the Federal Reserve (Fed) will continue to raise interest rates at today’s meeting. and the risk that the United States will face a debt default.
The Dow Jones Industrial Average closed at 33,684.53 points, down 367.17 points or -1.08%, the S&P 500 closed at 4,119.58 points, down 48.29 points or -1.16%, and the Nasdaq closed at 12,080.531 points, down 0% or -1.9 % point.
Banking stocks fell sharply, with the KBW Regional Banking Index plunging 5.5 percent, the sharpest one-day percentage drop since March 13 this year, after US regulators took control of First Republic Bank (FRB) and paved the way for JPMorgan to acquire FRB.
The S&P 500 Banking Index, the S&P 500 index of banking stocks, fell 2.3 percent, with JPMorgan down 1.59 percent, Goldman Sachs down 2.1 percent, and Morgan Stanley down 1.87 percent. Bank of America shares fell 3%.
International Monetary Fund (IMF) Managing Director Christalina Gorkieva warned that the US banking sector is likely to face increased vulnerability. Even JPMorgan, the largest bank in the United States Acquire FRB
“The rapid transition from low interest rates to higher interest rates is inevitable. This is a major reason for weakening the banking sector. and it is expected that the impact has not yet been exhausted JPMorgan’s acquisition of FRB does not mean that we will always have a ticket. And that doesn’t mean we won’t face further vulnerability in the future,” Gorgierva said at the 2023 Milken Foundation Global Conference in California. Shortly after JPMorgan acquired FRB on Monday,
The Fed Committee will announce its decisions today, US time. or in the early hours of Thursday Thai time Although investors are giving almost 100% weight to the forecast that the Fed will raise interest rates by 0.25% at this meeting.
On Citigroup’s side, it is expected that the Fed will raise interest rates by 0.25% at this meeting. And it will raise interest rates by another 0.25% at the June meeting. That defied market expectations that the Fed would end its rate hike cycle after its meeting in May.
In addition, the market is also worried about the US debt ceiling issue. US Treasury Secretary Janet Yellen warned that the US could face a debt default by June 1 if Congress does not raise the debt ceiling before that deadline.
Ms Yellen’s predictions about the default deadline Faster than expected by Wall Street analysts, with Goldman Sachs latest predicting that the US government will default at the end of July.
Energy stocks fall After WTI oil prices fell more than 5%, Exxon Mobil stock fell 4%, Chevron stock fell 4.3%, Halliburton stock fell 8.26%, KonocoPhillips stock fell 3.79%.
Pfizer shares closed up 0.38 percent after the share rose during the day. Earnings per share for the first quarter of 2023 were $1.23, above expectations of $0.97 and revenue of $18.3 billion. That was higher than expected at $16.6 billion.
In addition to the outcome of the Fed meeting investors are also keeping an eye on key US economic data this week. ADP private payrolls data for April and the Institute for Supply Management (ISM) service sector index for April are released today. and trade balance in March on Friday The US will release non-farm payrolls numbers for April.
