Wall Street is shaking again. The New York Stock Exchange had a bad day on Tuesday, the worst session in more than a month, weighed down by banks, with fears about the health of First Republic. The Californian bank announced that its net deposits had plunged by 41% in the first quarter of 2023 despite the 30 billion injected by 11 major institutions last month to prevent First Republic from going bankrupt like Silicon Valley Bank.
First Republic shares slumped almost 50% on Tuesday, dragging the entire sector tumble. "It was a little scary," said Steve Sosnick, chief strategist at Interactive Brokers, observing the rout of shares of other regional banks such as PacWest (-8.92%) or Western Alliance (-5.65%). The big banks have also taken the water losing between 2% and 3%, from Bank of America to JPMorgan via Citigroup.
Worst day in a month
The Dow Jones index fell 1.02% to 33,530.83 points, the tech-dominated Nasdaq lost 1.98% to 11,799.16 points and the S&P 500 dropped 1.58% to 4,071.63 points. The VIX index, known as the "fear index", which measures market volatility, jumped 15%.
"It must be said that this is the first day since March 22 where the major indices have fallen by more than 1%," Sosnick said. Edward Moya, an analyst for Oanda, said: "U.S. stocks have softened between mixed corporate results, banking nervousness and the news that President Joe Biden will run for re-election."
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