The US stock market closed with an escalated banking crisis, and the S&P and Dow hit a five-week low with double-digit declines in several regional bank stocks.

Steven000 joined discussion · May 5, 2023 10:24

S&P and Dow hit a five-week low, with double-digit declines in several regional banks, while AMD rose during trading and Apple rose nearly 3% after market.

The three major US stock indexes opened lower collectively. The Dow Jones Industrial Average and the S&P 500 maintained a downward trend throughout the day. When opening at the daily low in the morning, the S&P fell slightly more than 1%. At the beginning of the Dow's midday, it fell nearly 477 points, down more than 1.4%, and the S&P approached the intraday low. The Nasdaq Composite Index fell more than 0.8% when it hit the daily low in the morning, but rose briefly in the midday due to the rise of some semiconductor stocks.

The US stock market closed with an escalated banking crisis, and the S&P and Dow hit a five-week low with double-digit declines in several regional bank stocks....

In the end, the three major indexes collectively fell for the fourth consecutive day. $Dow Jones Industrial Average (.DJI.US)$ A drop of 286.5 points, a decrease of 0.86%, to 33127.74 points, hitting a new intraday low since March 30. $S&P 500 Index (.SPX.US)$ A decrease of 0.72%, to 4061.22 points, approaching the closing low since March 30th created last Wednesday, April 26. $Nasdaq Composite Index (.IXIC.US)$ A decrease of 0.49%, to 11966.4 points, setting a new low since April 26 for the second consecutive day.

Small-cap indexes, dominated by value stocks, $Ishares Russell 2000 Value Etf (IWN.US)$ A decrease of 1.18%, wiping out all the gains from Wednesday's counter-market rebound, underperforming the market and falling to the lowest level since October last year. Technology stocks were the main contributor. $Invesco QQQ Trust (QQQ.US)$ A decrease of 0.37%, marking the fourth consecutive day of decline, continuing to set new lows since April 26.

Among the major sectors of the S&P 500, only those with an increase of over 0.9% on Thursday. $Real Estate Select Sector Spdr Fund (The) (XLRE.US)$ And rose more than 0.7%. $Utilities Select Sector SPDR Fund (XLU.US)$ Two rose. Similarly, the drop was nearly 1.3%. $Financial Select Sector SPDR Fund (XLF.US)$ and $The Communication Services Select Sector SPDR® Fund (XLC.US)$ Leading the decline. $Energy Select Sector SPDR Fund (XLE.US)$ and $Industrial Select Sector SPDR Fund (XLI.US)$ Also fell more than 1%. $Consumer Discretionary Select Sector SPDR Fund (XLY.US)$ and $The Health Care Select Sector SPDR® Fund (XLV.US)$ Fell more than 0.7%. $Materials Select Sector SPDR ETF (XLB.US)$ Fell by 0.65%, $The Technology Select Sector SPDR® Fund (XLK.US)$ Fell by 0.48%, the bottom of the decline was a drop of nearly 0.3% $Consumer Staples Select Sector SPDR Fund (XLP.US)$ 。

Bank stocks plummeted in early trading, and the decline narrowed in the afternoon, still underperforming the broad market for the fourth consecutive day. The banking industry index $KBW Nasdaq Bank Index (.BKX.US)$ Dropped nearly 6% in early trading, closing down 3.8%, marking the fourth consecutive day of decline to the lowest level since September 2020; $Spdr Series Trust S&P Regional Bkg Etf (KRE.US)$ Dropped over 9% in early trading, closing down nearly 5.5%, both falling for the fourth consecutive day, respectively hitting the lowest level since November 2020 and October 2020.

Among large banks, $Wells Fargo & Co (WFC.US)$ Closed down 5%, $Bank of America (BAC.US)$ Fell 3.1%. $Morgan Stanley (MS.US)$ Fell 2.5%. $Goldman Sachs (GS.US)$ Fell 2.3%, leading the decline among Dow components. Another Dow component fell 1.4%, and another fell 1.7%. $JPMorgan (JPM.US)$ Fell 1.4%. $Citigroup (C.US)$ Fell 1.7%.

Among regional banks, WestPacific Bank, which plummeted in post-market trading on Wednesday due to rumors of a possible sale, initially dropped over 60% and closed down 50.6%, hitting a historical low. After rumors of a possible sale on Thursday, the bank initially dropped over 60%, and the decline narrowed to less than 40% after the bank denied the rumors. It closed down 38.5%, reaching a new low since September 2013. Following the termination of the acquisition agreement with the second-largest bank in Canada, Toronto-Dominion Bank,. $PacWest Bancorp (PACW.US)$ which fell more than 60% in early trading, but narrowed the decline to within 40% after the bank denied the rumors, closing down 38.5%, reaching a new low since September 2013. $Western Alliance Bancorp (WAL.US)$ After the termination of the acquisition agreement with the second-largest bank in Canada, Toronto-Dominion Bank. $First Horizon National (FHN.US)$ In the morning trading, it once fell more than 40%, closing down 33.2%, hitting a new low since October 2020. $Zions Bancorp (ZION.US)$ It fell by about 12% in the close. $Huntington Bancshares (HBAN.US)$ and $KeyCorp (KEY.US)$ It fell by 6.3%. $Citizens Financial (CFG.US)$ It fell by 5.2%.

After rising for four consecutive days overall, semiconductor stocks have fallen for three consecutive days. $PHLX Semiconductor Index (.SOX.US)$ and $iShares Semiconductor ETF (SOXX.US)$ In individual stocks, after the media reported that Microsoft and AMD are collaborating on the development of AI chips, they turned positive briefly during the session and closed down by approximately 0.5% and 0.6% respectively. $Advanced Micro Devices (AMD.US)$ Intraday rally, with a maximum increase of over 12% during the day, closing up 6.1%; first-quarter EPS earnings met expectations, but the year-on-year sales of core business mobile chips decreased by 17%. $Qualcomm (QCOM.US)$ Closing down 5.5%. $NVIDIA (NVDA.US)$ Closing down 0.86%.

Leading technology stocks have mixed gains and losses. $Tesla (TSLA.US)$ Closed up nearly 0.4%, rising for two consecutive days, continuing to move away from the low point since January 25th created on Wednesday last week. Among the six major FAANMG technology stocks, the parent company of Facebook $Meta Platforms (META.US)$ Closed down nearly 1.5%, marking a one-week low after a three-day decline; stopped after three consecutive declines on Wednesday. $Alphabet-A (GOOGL.US)$ Closed down nearly 0.7%, approaching the low point since March 30th created on Wednesday last week; while $Netflix (NFLX.US)$ Closed up nearly 0.5%, rising for two consecutive days after a two-day decline to the low point since March 22nd on Tuesday; $Amazon (AMZN.US)$ Up more than 0.3%, rising for three consecutive days, continuing to move away from the low on April 12th after two consecutive days of decline following the announcement of the first quarter report; as of Wednesday, it has fallen for three consecutive days to a one-week low. $Microsoft (MSFT.US)$ Up more than 0.3%; $Apple (AAPL.US)$ Down about 1%, falling for four consecutive days, continuing to refresh a one-week low, the first quarter revenue announced after the market exceeded expectations, quickly turning up after hours, up nearly 3% at one point.

Some AI concept stocks continue to rise against the market. $C3.ai (AI.US)$ Up about 3%, rising for two consecutive days, continuing to break away from the three-month low set by a sharp retreat on Tuesday, ending with two consecutive positive days but a nearly 12% decline. $SoundHound AI (SOUN.US)$ Up nearly 5.2%, $BigBear.ai Holdings (BBAI.US)$ Down nearly 3.1%, falling for four consecutive days, setting a new one-week low.

Key market news

President Biden met with CEOs of technology companies and personally used ChatGPT.
On Thursday, President Biden attended an artificial intelligence conference held at the White House, where he met with CEOs of top artificial intelligence (AI) companies including Google, Microsoft, and OpenAI to discuss the risks associated with AI technology and corresponding protective measures.

A White House official revealed that President Biden attended the conference and also used ChatGPT. "Biden has a comprehensive understanding of ChatGPT and personally conducted experiments."

Emergency loans from the Federal Reserve to financial institutions have significantly decreased, and the takeover of First Republic Bank is a major factor.

Emergency loans obtained by financial institutions from the Federal Reserve fell sharply last week, partly due to the takeover of First Republic Bank, which accounted for a large portion of the outstanding loans. According to data released on Thursday, as of the week ending May 3, the balance of loans issued by the Federal Reserve to financial institutions through two backup lending facilities was $81.1 billion, compared to $155.2 billion the previous week. The latest figure is the lowest since the banking turmoil began in March. The Federal Reserve stated that the balance of loans provided to First Republic Bank through the discount window and the bank term financing plan has been reclassified as "other credit," increasing from $170.4 billion the previous week to $228.2 billion.

Nearly half of Americans are worried about the safety of their deposits in banks, even more than during the financial crisis.

According to a Gallup poll, nearly half of all adult Americans (48%) are concerned about the safety of their money in bank or other financial institution accounts amidst the turmoil in the U.S. banking system. Of these respondents, 19% are "very" concerned and 29% are "somewhat" concerned. These latest findings are similar to the data shortly after the bankruptcy of Lehman Brothers in 2008, when 45% of adult Americans expressed either very or moderately high levels of concern about the safety of their funds. Although Gallup did not measure this data during less turbulent times in the banking industry, data from December 2008 indicated that concerns about deposit safety decreased slightly after the crisis was resolved, suggesting that a high level of concern about deposit safety may not be the norm for Americans.

U.S. officials are evaluating whether there is market manipulation in bank stocks.

According to sources cited by the media on Thursday, federal and state officials in the United States are evaluating the possibility of "market manipulation" behind the recent significant volatility in bank stocks, with the White House also stating that it will monitor the "short selling pressure" faced by healthy banks. Regional bank stocks in the U.S. have fallen sharply this week, with West Pacific Bancorp down nearly 70%. According to data from analytics firm Ortex, short sellers made $0.3789 billion in profits on Thursday alone by shorting certain regional banks. Insiders said that due to the strong fundamentals and ample capital of regional banks, the increase in short selling activity and stock market volatility in recent days has attracted more attention from officials and regulatory bodies.

Important News from the Company

Apple's first-quarter revenue exceeded expectations, with iPhone revenue up year-on-year, and it rose 3% in post-market trading at one point.

After the post-market trading on Thursday, May 4th, Apple, the world's largest publicly traded company with a market cap of $2.6 trillion, and a consumer electronics and technology giant, released its second quarter earnings report (Q1 2023 performance), marking the end of this reporting season for growth tech stocks.

Apple's first-quarter revenue was $94.84 billion, higher than analysts' expected $92.6 billion. Revenue from the flagship product, iPhone, was $51.33 billion, higher than the expected $48.97 billion, and it rose year-on-year. Apple's stock rose nearly 3% in post-market trading and then narrowed its gains.

Microsoft becomes the "golden sponsor" and joins forces with AMD to develop a new AI chip, causing AMD's stock to surge 10% at one point.

According to insiders on Thursday Eastern Time, Microsoft is cooperating with Advanced Micro Devices (AMD) to fund the latter's expansion into the field of artificial intelligence (AI) chips. This is part of Microsoft's multi-pronged strategy to obtain more desirable AI components. Insiders said that the two companies are collaborating as an alternative to Nvidia. Currently, Microsoft is providing financial support to AMD and working with the chipmaker to develop an AI chip codenamed Athena. The stock surged more than 12% during trading and ended up 6.1%.

Microsoft Bing has suddenly exploded with a major update! No need to wait, everyone can use it, with answers accompanied by graphics and text.

On Thursday local time, Microsoft announced a series of major upgrades to the search engine Bing and the Edge browser on its official website, calling these initiatives a new round of innovation in artificial intelligence (AI) technology. According to the press release, the new version of Bing no longer requires a "waitlist," and users can access this search engine, which combines GPT-4 technology, simply by logging into their Microsoft account. "This means that now everyone can try the new version of Bing and Edge more easily than ever before." In addition, Microsoft is upgrading Bing Chat to provide "richer and more intuitive answers" in the form of charts, graphs, and other new formats, helping users find the information they want in a more intuitive and effortless way.

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