Banking Sector Turmoil Weighs on Wall Street Ahead of Apple Earnings Release

Wall Street experienced declines on Thursday as turmoil in the banking sector dampened investor sentiment ahead of Apple’s highly anticipated quarterly results. The S&P 500 slipped 0.8%, while the Dow Jones Industrial Average and the Nasdaq fell 1% and 0.5%, respectively.

S&P 500 today

Regional banks Western Alliance Bancorporation, First Horizon National Corporation, and PacWest suffered heavy losses amid concerns about the banking sector’s stability. PacWest Bancorp’s shares plummeted over 40% following reports that the bank was exploring strategic options, including a potential sale. Although the bank confirmed it was evaluating all possibilities, it denied experiencing any unusual outflows in deposits.

This downturn comes days after JPMorgan’s acquisition of First Republic through a receivership deal when the latter failed to secure private funding. Investors remain concerned about the banking sector, despite hopes that the acquisition would alleviate worries.

In the tech industry, Apple Inc’s quarterly results are due after market close, with investors eager for updates on iPhone sales performance amid global economic slowdown. Qualcomm’s shares fell more than 5%, as its better-than-expected quarterly results were overshadowed by guidance that missed Wall Street estimates, largely due to a slow recovery in China.

Paramount experienced a significant drop, with shares falling over 20% after the entertainment company slashed its dividend and reported earnings below expectations.

The struggles on Wall Street offset optimism about the Federal Open Market Committee (FOMC) likely pausing rate hikes in June. The FOMC recently increased interest rates to 5.1%, with Morgan Stanley predicting a lengthy pause in rate hikes.

In other market news, Johnson and Johnson’s consumer health spinoff, Kenvue, made a strong debut on the New York Stock Exchange, with shares surging on Thursday.

On the economic front, the labor market showed signs of cooling as jobless claims rose more than expected. The increase in jobless claims comes just a day ahead of the monthly jobs report, which is projected to reveal the creation of 180,000 jobs in April.






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