Futures fall as bank contagion worries grip investors
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Major, regional banks slide
Block set to extend losses on Hindenburg's short positions
Durable goods, S&P Global manufacturing data awaited
Futures down: Dow 0.94%, S&P 0.79%, Nasdaq 0.46%
Updates prices throughout; adds details, comments
By Amruta Khandekar and Ankika Biswas
March 24 (Reuters) -U.S. stock index futures slipped into red on Friday as lingering concerns over the banking sector's health steered investors away from financial stocks despite reassurances from authorities.
Treasury Secretary Janet Yellen's reassurances that measures will be taken to keep Americans' deposits safe amid turmoil in the banking sector, sparked by the collapse of two U.S regional banks, had driven Wall Street's main indexes higher on Wednesday.
The comments added to the upbeat mood fueled by growing expectations that central banks were close to ending their aggressive rate hike campaign as the Fed and the Bank of England signaled caution about their next moves amid the global banking crisis after raising rates as expected.
"The volatility is continuing because the concerns are still bubbling about just how stable the U.S. banking sector is," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
"Although they (central bankers and the U.S. Treasury) are trying to reassure markets that they'll be standing by to take action if necessary, what investors are taking this as is the fact that regulators, central bankers and the U.S. government is still concerned about the potential for contagion."
Shares of major U.S. banks JPMorgan Chase & Co JPM.N, Wells Fargo WFC.N and Bank of America BAC.N dropped more than 2% in premarket trade.
Shares of regional lenders First Republic Bank FRC.N, PacWest Bancorp PACW.O, Western Alliance Bancorp WAL.N and Truist Financial Corp TFC.N fell between 2.1% and 2.8%.
European banks also came under pressure, with a report of a U.S. probe on Credit Suisse CS.N and UBS UBS.N further souring the mood. Their U.S.-listed shares were down about 6% each.
With traders' bets now tilted towards a pause in the Fed's rate hikes in May, U.S. Treasury yields fell for a third straight day, with the yield on the two-year note last at 3.6%.
On the economic data front, a report due at 8:30 am ET is expected to show orders for durable goods rose last month, while S&P Global's survey due after the opening bell is expected to show a weakening in U.S. manufacturing activity in March.
Investors will also keep an eye out for remarks by Fed's St. Louis President James Bullard on the U.S. economy and monetary policy later in the day.
At 6:35 a.m. ET, Dow e-minis 1YMcv1 were down 304 points, or 0.94%, S&P 500 e-minis EScv1 were down 31.5 points, or 0.79%, and Nasdaq 100 e-minis NQcv1 were down 59 points, or 0.46%.
Among major movers, Block Inc SQ.N slumped 4.2% in premarket trading, and looked set to extend losses from Thursday when Hindenburg Research disclosed short positions in the payments firm.
Reporting by Amruta Khandekar and Ankika Biswas; Editing by Sriraj Kalluvila and Vinay Dwivedi
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
