- The failures of Silicon Valley Bank and Signature Bank are weighing on the markets.
- The consumer price index for February will be released this morning.
- Uber and Lyft win major court victory in California.
Here are the key news investors need to start their trading day:
Investors are looking for clarity after a few days of dramatic reversals. Monday was a mess as markets tried to figure out the ramifications of the closings of Signature Bank and Silicon Valley Bank. The Dow ended lower, marking its fifth consecutive day of losses, while the Nasdaq managed to eke out a small win. Regional bank stocks took a huge hit as government actions to contain the fallout from Silicon Valley Bank and Signature failed to reassure investors and depositors, at least for now. First Republic, for example, fell a whopping 62% on Monday. Still, these stocks can wait for a rebound on Tuesday. Follow live market updates.
Kevin Lamarque | Reuters
The Federal Reserve is still on track to raise its benchmark interest rate by a quarter point next week, despite the second- and third-largest bank failures in history. As of Monday, even with the turmoil in the market, particularly among regional banks, traders saw an 85% probability that the rate hike would still happen as the central bank tries to cool inflation. However, Goldman Sachs stood out as the dissenting voice, arguing that Fed Chairman Jerome Powell and crew will hold off on a rate hike for now. “We think Fed officials are likely to prioritize financial stability for now, viewing it as the immediate issue and high inflation as a medium-term issue,” Goldman said in a note to clients. The Fed’s next policy-setting meeting is scheduled for the 21st-22nd. March.
A shopper looks in the meat section of a supermarket in Los Angeles on February 13, 2023 in Los Angeles.
Mario Tama | Getty Images News | Getty Images
Speaking of inflation, the government’s February consumer price report is due at 8:30 a.m. ET Tuesday. It is expected to come in somewhat cooler than January’s consumer price index, showing that the Fed continues to make some progress in the fight against price increases. This report will take on additional significance in light of the context of the Silicon Valley Bank and Signature Bank failures, which sparked turmoil among regional banks. As CNBC’s Patti Domm points out, before the banking upheaval, a warm CPI report could have pushed the Fed to raise interest rates by half a point next week. Now, with the stability of the financial system at the top of everyone’s mind, even a larger-than-expected reading is unlikely to push the Fed to go higher than a quarter point.
Travelers wait for an Uber rideshare vehicle at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California.
Mario Tama | Getty Images
Shares in Uber, Lyft and DoorDash all jumped in off-hours trading after a California appeals court allowed such companies to treat their drivers as independent contractors and not employees. The decision upheld a measure called Proposition 22, which California voters approved in November 2020 after a costly campaign in which ride-hailing and delivery companies spent more than $180 million. Monday’s ruling overturned a lower court’s rejection of Proposition 22, which was challenged by a group of rideshare drivers. The measure exempts Uber and others from following several tort laws.
Local residents of the village of Bohorodychne walk on a destroyed bridge over the Siversky Donets to collect bread from the other bank, in Bohorodychne, Donetsk Oblast, on March 10, 2023, amid Russia’s military invasion of Ukraine. (Photo by ANATOLII STEPANOV / AFP) (Photo by ANATOLII STEPANOV / AFP via Getty Images)
Anatoly Stepanov | Afp | Getty Images
Authorities extended a Russian-Ukrainian grain export agreement by 60 days, Russia’s deputy foreign minister told a Russian news agency. The agreement has enabled Ukraine to export wheat, corn and other agricultural products through the Black Sea. A Russian blockade in the earlier stages of the war had damaged global food supplies and led to price inflation. Elsewhere, Ukrainian President Volodymyr Zelenskyy defended his decision to continue defending the eastern Ukrainian city of Bakhmut. “We must destroy the enemy’s military power – and we will destroy it,” he said. Follow live war updates.
– CNBC’s Sarah Min, Jeff Cox, Patti Domm, Rohan Goswami and Holly Ellyatt contributed to this report.
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