(Bloomberg) — US stock futures edged lower and Treasuries slipped as investors assessed JPMorgan Chase & Co.’s winning bid to acquire crisis-hit lender First Republic Bank.
Contracts for the S&P 500 were 0.1% lower, after a 0.8% jump for the index Friday to cap a weekly gain as well as back-to-back monthly advances. Contracts for the tech-heavy Nasdaq 100 fell 0.3%. Trading was closed in many major European and Asian markets for a holiday.
Shares in First Republic bank were halted after tumbling 46% in premarket trading. Regulators had worked into the evening on Sunday in Washington before announcing JPMorgan won the bidding to acquire the lender in an emergency government-led intervention.
The collapse of First Republic was the second-biggest bank failure in US history. Private rescue efforts had failed to undo the damage from wrong-way investments and depositor runs that have roiled regional lenders.
JPMorgan acquired about $173 billion of First Republic’s loans, $30 billion of securities and $92 billion in deposits. JPMorgan and the Federal Deposit Insurance Corp., which orchestrated the sale, agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans, the agency said early Monday in a statement. JPMorgan shares rose 3.9% in premarket trade.
Treasuries fell after a Friday rally. The yen weakened while the greenback was little changed. A sudden drop for Bitcoin dragged the cryptocurrency further below $30,000 after a stellar run this year.
Earlier, Japan’s Topix benchmark rose 1% to close at the highest level since September 2021 with all sectors advancing. Australian shares also rose.
Interest rate decisions will be in focus this week. The Federal Reserve is expected to increase borrowing costs by 25 basis points to a range of 5% to 5.25%, a level not seen since 2007. The European Central Bank is also forecast to raise its key lending rates by 25 basis points. The Reserve Bank of Australia will likely keep interest rates on hold when it meets Tuesday.
Stock market investors holding on to hopes that the Federal Reserve will cut rates in the second half could be disappointed later this week, according to Morgan Stanley’s Michael Wilson — a staunch Wall Street bear.
“If the message delivered at this meeting is more hawkish, it could provide a near-term negative surprise for equities,” Wilson wrote in a note.
Apple Inc. headlines another busy week of earnings that includes Advanced Micro Devices Inc. and Ford Motor Co. In Asia, banks including HSBC Holdings Plc and Macquarie Group Ltd. will deliver their profit reports. In Europe, Volkswagen AG and energy giants BP Plc and Shell Plc are on the docket.
Elsewhere, oil prices declined and gold fell.
Here are some of the main moves in markets:
- S&P 500 futures were little changed as of 8:20 a.m. New York time
- Nasdaq 100 futures fell 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The Bloomberg Dollar Spot Index was little changed
- The Japanese yen fell 0.4% to 136.85 per dollar
- Bitcoin fell 2.8% to $28,527.76
- Ether fell 2.5% to $1,846.24
- The yield on 10-year Treasuries advanced eight basis points to 3.50%
- West Texas Intermediate crude fell 2.1% to $75.19 a barrel
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.