On Wednesday, April 26, 2023, Wall Street faced its deepest decline so far for the month, as concerns about a slowing U.S. economy dominated the markets. News of plunging deposits at regional First Republic Bank added to the worries about the health of the banking sector. The stand-off among lawmakers in Washington over raising the U.S. debt ceiling also weighed on markets.

Key takeaways:
✅ Wall Street suffered its deepest decline this month due to concerns about a slowing U.S. economy, and news of plunging deposits at First Republic Bank.
✅ The Dow Jones Industrial Average fell 344.57 points, or 1.02%, to 33,530.83; the S&P 500 lost 65.41 points, or 1.58%, at 4,071.63, and the Nasdaq Composite dropped 238.05 points, or 1.98%, to 11,799.16.
✅ The Dollar gained ground, and EUR/USD retreated from a near 10-month high as worries over corporate results and the global economic outlook deepened.
✅ Crude oil prices reversed Monday’s gain due to economic worries and the strong Dollar, with the WTI crude oil dropping 2.25% to $77.07 per barrel, and Brent settling at $80.77 per barrel, down 2.37% on the day.
✅ Gold prices gained as market participants awaited a slew of economic data later in the week that could sway the Federal Reserve’s policy decisions, with spot gold adding 0.4% to $1,997.63/oz.

First Republic Bank’s Record Deposit Outflows:
First Republic shares plummeted by 49%, hitting a record low after the beleaguered lender reported a more than $100 billion flight in deposits in the first quarter, following the biggest banking crisis since 2008 last month. This has further added to concerns about the bank sector’s health, and investors are questioning the long-term prospects of First Republic Bank.

United Parcel Service Inc.’s (UPS) Revenue Forecast:
Shares in United Parcel Service Inc fell 10%, marking its biggest daily loss since July 2006, after the courier company forecasted full-year revenue at the lower end of its prior target. The lower revenue forecast is a worrying sign for the transportation and logistics sector, and it reflects concerns about the global economic outlook.

Consumer Confidence Falls:
Tuesday’s data showed U.S. consumer confidence fell to a nine-month low in April. This has raised questions about the strength of the economic recovery and the willingness of consumers to spend, which could have broader implications for the U.S. economy and its financial markets.

Market Declines:
The Dow Jones Industrial Average fell 344.57 points, or 1.02%, to 33,530.83, and the S&P 500 lost 65.41 points, or 1.58%, at 4,071.63, with both marking their biggest one-day percentage losses since March 22. The Nasdaq Composite dropped 238.05 points, or 1.98%, to 11,799.16 in its biggest one-day percentage decline since March 9.

Currency Markets:
In currency markets, the Dollar gained ground and EUR/USD retreated from a near 10-month high as worries over corporate results and the global economic outlook deepened. The Dollar Index rose 0.51%, with EUR/USD down 0.62% to 1.0973. USD/JPY slipped 0.48% at 133.60, while GBP/USD was last trading at 1.2407, down 0.60% overnight in New York trading.

Crude Oil Prices:
Crude oil prices reversed Monday’s gain as economic worries and the strong Dollar offset optimism over China demand expectations. The WTI crude oil dropped 2.25% to settled at $77.07 per barrel, and Brent settled at $80.77 per barrel, down 2.37% on the day.

Gold Prices:
Gold prices gained as market participants awaited a slew of economic data later in the week that could sway the Federal Reserve’s policy decisions. Spot gold added 0.4% to $1,997.63/oz.

Upcoming Economic Data Releases:
Tonight, we have Durable Goods Orders to be followed by the first estimate for Q1 2023 U.S. GDP numbers tomorrow. On Friday, we are expecting the release of the Core Personal Consumption Expenditure Index.

Crypto Market:
Most major digital assets were trading higher last night, bucking the trend of U.S. equity markets. Bitcoin (BTC) was changing hands at $27,557, up 0.6% in the past 24 hours, after swinging between a day’s low of $27,207 and a high of $27,727. Ethereum (ETH) was trading 0.1% higher at $1,834, after hitting the lowest level since April 4 at $1,807. Bitcoin and Ethereum, which together account for 65.2% of the crypto market, are up 66% and 53% year-to-date.

Binance.US announced it has called off its $1.3 billion deal to buy assets of bankrupt crypto lender Voyager Digital, citing a hostile and uncertain regulatory climate. The move adds another hurdle for Voyager, which has been looking to raise funds through an asset sale to repay creditors after it collapsed into bankruptcy last year. The company had initially agreed to sell its assets to major digital asset exchange FTX, but that deal fell apart when FTX imploded in November. Binance.US stepped in later, but the acquisition was clouded by regulatory opposition. Last month, a federal judge temporarily stopped Voyager from completing the proposed deal, allowing the U.S. government more time to pursue challenges.