NASDAQ Index, SP500, Dow Jones Analysis – Major Indices Retreat As Financial Stocks Fall

Key Insights

• Regional banks’ shares fall as traders worry that regulators will fail to stop financial contagion in the sector. 
• Tech stocks get some support as traders focus on the AI-related demand and falling Treasury yields. 
• Dow Jones remains stuck in the 31,400 – 32,400 range. 

SP500

SP500 settled below the 3950 level as financial stocks found themselves under pressure ahead of the weekend. Traders remain worried about the developing crisis in the regional banks sector.

First Republic Bank, U.S. Bancorp, and KeyCorp were the worst performers in the SP500 today. Shares of other regional banks have also moved lower.

Traders fear that $30 billion in deposits from big banks, which were pledged to First Republic Bank, would not be sufficient to stop the financial contagion in the regional banks sector. First Republic was forced to suspend its dividend after receiving support from big banks.

Energy stocks have also moved lower in today’s trading session as oil and natural gas markets remained under material pressure.

Today, traders also had a chance to take a look at the U.S. Industrial Production report. The report indicated that Industrial Production remained unchanged in February, compared to analyst consensus of +0.2%. Consumer Sentiment declined from 67 in February to 63.4 in March, missing analyst estimates. Importantly, the problems of the regional banks did not have an impact on the preliminary Consumer Sentiment data, so the final numbers, which will be released at the end of the month, may be worse.

NASDAQ

NASDAQ settled near the 12,500 level as demand for tech stocks remained strong. AI hype provides material support to semiconductor stocks as traders bet that demand for such products would grow in the upcoming years. Meanwhile, falling Treasury yields provide additional support to the yield-sensitive tech stocks.

Dow Jones

Dow Jones pulled back below the 32,000 level amid a broad sell-off in equity markets. Microsoft and Home Depot were the only Dow Jones components that managed to gain some ground in today’s trading session. From a big picture point of view, Dow Jones remains stuck in the 31,400 – 32,400 range.

For a look at all of today’s economic events, check out our economic calendar.