Markets Sink on Interest Rate, Banking Worries

U.S. equities gave up early gains and plunged in the afternoon on March 9 ahead of the much-anticipated February jobs report due the following day. Concerns are growing that another month of strong employment growth could lead the Federal Reserve to be more aggressive in raising interest rates to fight inflation. A selloff of financial sector stocks added to the retreat.

The losses were broad-based, with almost every stock in the Dow declining. Only nine stocks in the S&P 500 were up more than 1%. Banking stocks were hard hit after SVB Financial Group (SIVB) announced a $2.25 billion stock sale as it faced financial issues. That added to the distress caused when cryptocurrency bank Silvergate Capital (SI) said it was liquidating. Shares of both firms plummeted, and they dragged on the entire sector. Shares of big banks, such as JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC), sank. Smaller banks fared even worse, with shares of First Republic Bank (FRC), Signature Bank (SBNY), and Zions Bancorporation (ZION) tumbling double-digit percentages. 

Tech stocks, which are less attractive when borrowing costs rise, declined. All the FAAMG stocks were lower. Tesla (TSLA) shares lost 5%. Shares of Walgreens Boots Alliance (WBA) dropped 3.5% when California didn't renew a $54 million contract with the pharmacy chain in a dispute over Walgreens' decision involving the sale of abortion pills. Etsy (ETSY) shares slid after Jefferies double downgraded the stock.

GE Outlook

Intel (INTC) was the only stock in the Dow to be in positive territory as the chipmaker announced a new endeavor in artificial intelligence (AI). General Electric (GE) was the best-performing stock in the S&P 500 as the manufacturer gave a strong outlook for its aviation business. Shares of DISH Network (DISH) rose as the satellite TV provider received approval from government regulators to test a 5G wireless spectrum, which it may purchase from T-Mobile U.S. (TMUS).

The yield on the 10-year Treasury note fell. Oil futures reversed course and ended in the red. Gold prices were up 1%. The U.S. dollar declined versus the euro, pound, and yen. Prices for major cryptocurrencies sank.