The S&P 500 slipped 0.8% on Thursday as worries about the banking sector weighed on investor sentiment. Western Alliance Bancorporation, First Horizon National Corporation, and PacWest Bancorp all suffered heavy losses, with PacWest falling over 40% after reports it may be exploring a possible sale. The turmoil comes just days after JPMorgan acquired First Republic as part of a receivership deal after the latter failed to secure funding privately. Investors are concerned about remaining regional banks, leading to questions about who may be the next to suffer.
Tech stocks traded mixed ahead of Apple's quarterly earnings report, which was due after markets closed. Investors were eager for an update on iPhone sales amid slowing global growth. Qualcomm fell over 5% despite better-than-expected quarterly results, as guidance missed Wall Street estimates due to a slow recovery in China. Paramount also tumbled more than 20% after falling short of earnings expectations and slashing its dividend.
Despite optimism about a potential Fed pause in June, struggles in the banking and tech sectors offset gains in other areas. Kenvue, Johnson & Johnson's consumer health spinoff, surged on its debut on the New York Stock Exchange, but the rise in jobless claims provided more evidence of a cooling labor market.
