Australian Market

Australia’s S&P/ASX 200 lost 1.4%, slipping into negative territory for 2023 on a third consecutive daily loss. All 11 sectors finished lower with the tech sector shedding 3.4%. The ASX 200 has lost 0.4% so far in 2023.

US Market 

Bank stocks climbed, with some traders anticipating that financial-sector distress could remain contained and leave the Federal Reserve free to focus on tackling inflation. The S&P 500 rose 1.7%, the Dow Jones Industrial Average added 1.1%, and the tech-centric Nasdaq Composite climbed 2.1%. The indexes jumped to a strong start in morning trading before giving back some gains in the afternoon.

Trading steadied compared with Monday’s stormy session, which brought a deep rout for bank stocks and a rally for government bonds. “The action in regional banks was certainly concerning, but at this point it seems limited to a handful of unique names,” said Michael Sheldon, chief investment officer at RDM Financial. Still, he added, further shocks can’t be ruled out.

Commodities

Gold prices ended lower, retreating from a five-week high as Treasury yields and the dollar jumped after three days of sharp declines, while traders digested the release of the U.S. inflation report which showed pressure on prices continued to cool in February.

Gold futures for April delivery fell 0.3% to end at $1,910.90 per ounce on Comex. “Gold was on the backfoot too, testing the $1,900 per ounce level as safe-haven demand eased, having surged by almost 6% from last week’s lows,” said Raffi Boyadjian, lead investment analyst at XM.

Oil Futures

Oil futures fell sharply, logging their lowest close of 2023 as traders were unable to shake recession fears after another round of hot U.S. inflation data and continued worries over the banking sector. West Texas Intermediate crude for April delivery fell 4.6% to finish at $71.33 a barrel on the New York Mercantile Exchange. May Brent crude declined 4.1% ending at $77.45 a barrel on ICE Futures Europe.

Both WTI and Brent saw the lowest close for a front-month contract since Dec. 9, according to Dow Jones Market Data. “Looking ahead, the supply side of the current fundamental backdrop remains fairly steady; however, fading optimism surrounding China’s economic recovery and still-elevated recession fears are leaving risks skewed to the downside,” wrote analysts at Sevens Report Research.

Asian Markets

Earlier Tuesday, Chinese shares ended lower, tracking declines among other Asian equities, amid contagion worries following the failure of Silicon Valley Bank. Local banking shares fell on spillover negative sentiment. The benchmark Shanghai Composite Index dropped 0.7%. The Shenzhen Composite Index declined 1.0% and the ChiNext Price Index fell 0.6%.  

Hong Kong’s benchmark Hang Seng Index sank 2.3%, pulling back from Monday’s rally. Banking shares and insurance companies fell on a spillover of negative sentiment. The Nikkei Stock Average dropped 2.2%, posting its biggest percentage loss since Dec. 20, as government bond yields dropped sharply.