Stock Market Reeling After Banking Sector Turmoil and ECB Rate Hike
The stock market is still feeling the effects of the banking sector's recent turmoil. Last week, the 10-year U.S. Treasury yield plummeted to 3.41%, while the two-year Treasury yield dropped to 3.84%, creating a spread of -43 basis points. On Wednesday morning, the Dow Jones Industrial Average dropped more than 1.7%, or more than 500 points, while the S&P 500 and Nasdaq each fell 1.5%. The Dow Jones Industrial Average tumbled 4.4% in last week's stock market trading, and the S&P 500 index sold off 4.55%. The Nasdaq composite skidded 4.7%, and the small-cap Russell 2000 dived 8%.
The CME FedWatch Tool now expects a 83% chance of a 25-basis-point rate hike at the March meeting. Approximately 17% anticipate that rates will remain the same President Biden gave assurance to the American people on Monday that the nation's banking system is stable following the aftermath. “Americans can have confidence that the banking system is safe. Your deposits are safe. No losses will be borne by the taxpayer,” Biden said during a press conference. “Managers of these banks will be fired. Investors in these banks will not be protected.
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