The lack of bad news sustained positive sentiment on Wall Street. The session today is going to be volatile.

The purchase deal on Silicon Valley Bank reassured investors and revived the risk-on mood. The technology sector in the S&P 500 remains under pressure. As a result, the benchmark indices closed mixed yesterday.
The Dow Jones rose by 194 points or 0.6%. The Nasdaq dropped by 0.47% or 55 points. The S&P 500 inched up by a modest 0.16% to close at 3,977.

The major stock indices traded sluggishly with mixed dynamics in the New York pre-market. The S&P 500 is expected to trade in the corridor between 3,870 and 4,040.

The banking sub-index of the S&P 500 and the regional banking index opened the week 3.1% and 0.6% up respectively. Shares of the leading US banks rebounded by 2.9-5%, having logged the strongest performance among the S&P 500 stocks. Shares of First Republican surged by more than 50% yesterday after the company announced its purchase of deposits and loans of Silicon Valley Bank. Besides, shares of First Republic Bank jumped by nearly 11.8% after Bloomberg reported that the US authorities pondered over the scenario of extra aid to banks.

The bullish high-tech stocks were weighed down. So, the Nasdaq closed in the red. Fast-growing high-tech giants completed a strong quarter. Hence, the decline could be triggered by profit-taking.

Walt Disney shares grew by 1.6% after the company fired 7,000 employees.

Futures on US stock indices traded lower in the pre-market. Yields of US Treasuries spiked as investors eased fears about a crisis in the banking sector.

Yields of benchmark 10-year Treasuries climbed to 3.52% whereas yields of 2-year Treasuries rose by 7 basis points to 4.03%. Such moves put pressure on the bullish stocks such as Apple, Meta, and Alphabet which shed 0.3-0.6% before the opening bell.

Shares of large and regional US banks grew modestly by 0.3-1.2% in the pre-market after their stunning recovery. Wall Street is trading mainly flat for a while ahead of a speech by Fed Vice Chair for Supervision Michael Barr in front of the Senate Banking Committee. The regulators pledged to revise their rules and procedures but they insisted on sustainability of the financial system. From the report by Michael Barr, lawmakers will find out what exactly went wrong and will push ahead with their solutions.

Before the hearing, Fed’s policymakers and the FDIC confirmed that the funds of depositors are safe. Both regulators said that they are investigating the culprit of the crash of the two banks. They are also pondering over amendments to the current rules so that such incidents aee prevented in the future.

Member of the Board of Governors Philip Jefferson said yesterday that the stress among small banks could be the most painful for small businesses. Deputy Treasury Secretary Nellie Liang should state in Congress today that the government is going to stem the contagion in the banking sector and ensure the safety of deposits of common Americans.
Extreme volatility on Wall Street forced investors to close positions and pushed others to benefit from sharp price moves. They foresee the quiet market soon.
It means that a relief rally is based on technical factors. At the end of the month after Easter, investors will decide whether a recovery of the battered bank stocks and risky assets happened because the market regained trust.
The jitters in the banking sector obscured the agenda of monetary policy. Even though inflation is gradually easing, investors are puzzled about further policy moves. Now central banks have to strike a balance between the goals of price stability and smooth market operation.

As for the corporate news, Lyft shares rose by 4.0% in the pre-market after the company hired former Amazon CEO David Risher as a new leader. Investors are also monitoring revenues of Micron Technology и McCormick & Co.

After the opening bell, investors will get to know a consumer confidence index which is expected to improve slightly last month. Thus, the quiet pre-market could be followed by a volatile session.

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