June S&P 500 futures (ESM23) are up +0.14%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.17% this morning after three major U.S. benchmark indices finished the regular session solidly lower as renewed fears about the health of the U.S. banking sector weighed on sentiment ahead of the Federal Reserve’s interest rate decision.
In Tuesday’s trading session, energy stocks were the biggest drag on the market as the price of WTI crude dropped over -5% to a five-week low on worries about a potential U.S. debt default and weak economic data. Financial stocks also weighed on the broader market amid continued jitters over the stability of the regional banking space despite the rescue of First Republic Bank (FRC) through a takeover by JPMorgan (JPM). The KBW Nasdaq Regional Banking Index plunged over -5%, with PacWest Bancorp (PACW) tumbling over -27% and Western Alliance Bancorporation (WAL) slumping more than -15%. In addition, sentiment was weighed down by apprehensions regarding the U.S. debt ceiling, with Treasury Secretary Janet Yellen cautioning that the country could be unable to meet its financial commitments as early as June 1st.
