On Monday, US Stocks lost ground after traders spent the first trading day of May assessing the announcement of First Republic Bank’s seizure and the subsequent takeover by JPMorgan Chase.
After two straight sessions of gains that capped an increase for April, the S&P 500 Financial sector declined, helping to drag down the index.
At 4,167.87 points, the S&P 500 dropped 1.61 points or 0.04%. The Dow Jones Industrial Average slipped 46.46 points, or 0.14%, at 34,051.70. The Nasdaq Composite lost 13.99 points, or 0.11%, and closed at 12,212.60.
However, after JPMorgan acquired most of First Republic’s assets in a $10.6 billion deal, its shares led to the Dow Jones Industrial Average. First Republic will deposit $92 billion with JPMorgan after several clients withdrew $100 billion from the California lender in the first quarter. JPMorgan’s stock increased 2.16% to close at $141.20.
The actions came after Silicon Valley Bank and Signature Bank’s unexpected failures and seizures in March. Shares of First Republic Bank were suspended during trading after falling precipitously.
Investors eagerly await Wednesday’s Fed 2-day Policy Meeting to hear what Fed Chair Jerome Powell says about the latest bank failure. Investors are closely watching this week’s decision on the next interest rate along with essential data like employment numbers. The US central bank is anticipated to increase its benchmark lending rate for the tenth time.
Assuming that the US Fed will raise rates, US Treasury yields increased. By late Friday, the yield on the 10-year Treasury note rose to 3.56% from 3.43%. The 2-year Treasury’s yield increased to 4.12% from 4.02%.