On Friday, the stock market closed with a positive gain for the second consecutive trading session, ending the week with a rise in the S&P 500, Nasdaq Composite, and Dow. However, fears about the health of First Republic Bank continue to loom over Wall Street.
The blue-chip index marked its best monthly gain since January, with the Dow gaining 289 points or 0.9% for the week, the S&P 500 adding 0.9%, and the Nasdaq Composite ticking up 1.3%. This was despite the shares of First Republic dropping 43% on Friday, reaching record lows after reports swirled that the regional lender is likely headed for receivership by the FDIC. Shares of the embattled lender are down 97% this year.
Shares of Snap also fell 17% on Friday after the company reported its first quarterly sales decline since going public in 2017. Amazon stock slid about 4% after the e-commerce giant reported a slowdown in its cloud business.
Investors also digested two highly anticipated reports from federal regulators on the events that led up to the collapses of Silicon Valley Bank and Signature Bank. Regulators pointed out flaws in the banks’ management as well as in their own processes for overseeing them.
With Big Tech and bank earnings largely out of the way, investors are focusing on the Federal Reserve’s next interest rate decision set to be announced Wednesday. Analysts expect the bank to raise rates by a quarter point. Federal Reserve Chairman Jerome Powell will likely face questions about the central bank’s plans for the rest of the year in his press conference that same day, as well as questions about tighter credit conditions, as the chaos surrounding First Republic news renews banking fears.
Despite the ongoing concerns about First Republic, the Dow rose 272 points or 0.8%, the S&P 500 gained 0.8%, and the Nasdaq Composite advanced 0.7%. However, as stocks settle after the trading day, levels might still change slightly.
In summary, while the stock market closed on a positive note for the week, the looming concerns over First Republic Bank continue to create chaos in the financial market. Investors are keeping a close eye on the Federal Reserve’s next interest rate decision and Chairman Jerome Powell’s press conference for further insights.