Tech Stocks Pull S&P 500 Down
U.S. stocks closed slightly lower on Tuesday as investors analyzed comments from a top U.S. regulator regarding struggling banks and sold technology-related stocks after their recent strong performance. Shares of Apple and Microsoft, along with other tech-related stocks, were among the biggest drags on the S&P 500.
Silicon Valley Bank's Risk Management Failure
The Federal Reserve's leading banking regulator, Michael Barr, informed a Senate panel that Silicon Valley Bank poorly managed risk before its collapse, describing its efforts as "terrible."
Profit-taking and Waning Enthusiasm in Tech Sector
According to Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, profit-taking and reduced enthusiasm contributed to the tech sector's downturn. The S&P 500 technology index was down 0.5% on Tuesday but still up significantly for the quarter.
Bank Stocks Struggle Amid Silicon Valley Bank Collapse
The KBW regional banking index fell 0.2% on the day, with bank stocks experiencing a sharp sell-off following the problems at Silicon Valley and other banks. First Citizens BancShares Inc's shares rose slightly after a 50% increase the previous day when it announced plans to acquire Silicon Valley Bank's deposits and loans.
Dow Jones, S&P 500, and Nasdaq Composite Slip
The Dow Jones Industrial Average dropped 37.83 points (0.12%), the S&P 500 fell 6.26 points (0.16%), and the Nasdaq Composite decreased by 52.76 points (0.45%). Stricter regulations for banks with deposits over $100 billion and rising Treasury yields have increased anxiety levels, particularly for struggling banks.
Consumer Confidence Rises; Labor Market Concerns Grow
A survey revealed that U.S. consumer confidence rose unexpectedly in March. However, Americans are becoming increasingly concerned about the labor market. Investors eagerly await upcoming bank results to gain insight into the sector's health following the collapse of Silicon Valley Bank and Signature Bank.
Alibaba Announces Business Split; Micron Technology Shares Rise
Alibaba Group Holding's shares jumped 14.3% after announcing plans to divide its business into six main units covering e-commerce, media, and the cloud. After the closing bell, Micron Technology Inc's shares rose about 1%, forecasting third-quarter revenue in line with Wall Street expectations.