NASDAQ Index, S&P 500, Dow Jones Analysis – Stocks Rebound As U.S. Moves To Protect All Deposits At Silicon Valley Bank

Key Insights

• Stocks rebound from session lows as traders calm down after U.S. President Biden speech. 
• Regional banks’s shares remain under strong pressure. 
• Energy stocks retreat amid a pullback in the oil markets, while tech stocks move higher as Treasury yields fall to new lows. 

S&P 500

S&P 500 managed to rebound as U.S. announced that it would guarantee deposits at the Silicon Valley Bank to protect the financial system from contagion. U.S. President Joe Biden said that Americans should have confidence that the banking system was safe.

While Biden managed to calm markets, shares of regional banks remained under strong pressure. First Republic Bank, Comerica, KeyCorp, Zions Bancorporation were down by 20-60% in today’s trading session. Traders fear that additional problems may emerge in the upcoming weeks.

The yield of 2-year Treasuries declined towards the 4.00% level as traders bet that the Fed will be forced to cut rates by the end of 2023 to provide additional support to the economy. It looks that falling Treasury yields have provided some support to stocks.

Energy stocks have also moved lower today as traders focused on the pullback in the oil markets, which was triggered by the problems of U.S. regional banks.

NASDAQ

NASDAQ rallied above the 12,000 level as lower yields boosted demand for yield-sensitive tech stocks. Leading tech stocks like Microsoft and Apple were up by about 3% in today’s trading session.

In case NASDAQ manages to settle above the 12,000 level, it will gain additional upside momentum and head towards the next resistance level, which is located at the 20 EMA at 12,125.

Dow Jones

Dow Jones found support near 31,500 and rebounded towards the 32,000 level. American Express, Goldman Sachs, and JPMorgan Chase were among the worst performers in the Dow Jones index amid a broad sell-off in financial stocks. The above-mentioned Apple and Microsoft led the rebound as demand for tech stocks increased.

For a look at all of today’s economic events, check out our economic calendar.