U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital. The uneasiness has been exacerbated by the closure of Signature Bank in New York over the weekend. Treasury yields are falling sharply and the U.S. dollar is dropping. Crude oil prices are seeing pressure, and gold is rallying. The economic calendar is dormant today, but will heat up tomorrow as the Consumer Price Index will be released, beginning the development of the February inflation picture. Asia finished mixed, with Chinese and Hong Kong markets rising, and Europe is falling broadly amid heightened volatility due to the turbulence in the banking sector.
As of 8:58 a.m. ET, the March S&P 500 Index future is 59 points below fair value, the Nasdaq Index future is 56 points south of fair value, and the DJIA future is 432 points below fair value. WTI crude oil is dropping $3.81 to $72.87 per barrel, while Brent crude oil is falling $3.62 to $79.16 per barrel. The gold spot price is up $39.80 to $1,907.00 per ounce. Elsewhere, the Dollar Index is declining 0.7% to 103.92.
The stock markets have tumbled in the wake of the failure of SVB Financial Group (SIVB), as well as crypto-related Silvergate Capital Corp. (SI), and the closure of Signature Bank (SBNY) over the weekend, which has fostered severe volatility in the markets and fueled concerns about contagion in the financial markets. Meanwhile the Treasury Department, the Fed and Federal Deposit Insurance Corporation (FDIC) have enacted several measures to contain the issue.
For a look at what our experts think about the recent stock market drop, read our latest article, Bank Failure Pressures Stocks. Fixed Income Strategist with the Schwab Center for Financial Research, Collin Martin notes that, "The U.S. banking system is still relatively healthy. Capital ratios, a measure of banks' ability to cover their loans, have declined over the last year but are still at adequate levels." Meanwhile, he adds that "although markets are still pricing in additional Fed rate hikes at upcoming policy meetings, concerns about the financial sector have helped push down the expected "peak" rate."