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US stock futures declined after the Federal Reserve raised rates by 25 basis points and concerns over a possible contagion in the regional banking sector reemerged.

• Dow and S&P 500 futures are little changed, while Nasdaq 100 futures increased by 0.2%.
• PacWest’s stock fell by over 50% in after-hours trading after reports of the bank weighing strategic options, including a potential sale. Other regional banks, such as Western Alliance (-23%) and Zions Bancorporation (-10%), also experienced declines.
• In regular trading on Wednesday, the Dow fell by 0.8%, the S&P 500 dropped 0.7%, and the Nasdaq Composite lost 0.46%.
• Fed Chair Jerome Powell mentioned that it would take time for inflation to decrease and it would not be appropriate to lower rates under such circumstances.
• Investors are now anticipating the initial jobless claims and monthly jobs report, as well as upcoming corporate earnings reports.

The daily interval of the SPX futures contract auctioned out of the Quarter’s developing value area, while the swing lows back from April might serve as support for buyers. The lower value extreme could lead core sellers to add to core short positions, as the calculations of the session point to a more bearish-biased market. The volatility for the day is positive, pointing to the downside as well. Sellers may target the Year’s VWAP for absorption purposes below the mentioned swing lows to find potential core buyers.

The intraday perspective of the market appears to find long liquidations and shorting around the lows of the previous session and the upper value extreme of the session, targeting a rotation to the lower extreme.

The dollar is trading slightly higher against major currencies due to yesterday’s interest rate hike of about 25 bps, while a potential concluded halt of hikes might be bearish for the greenback.

Gold is trading up by about 0.3% due to recession fears and resurfaced concerns about the banking sector, as investors look for safe-haven assets.

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Crude oil is trading 0.6% higher around $69 a barrel, while a stronger dollar might support the commodity. The US changed its role to a net exporter and more trade in the US dollar support the currency’s value. However, fears about a slowdown in economic health might decrease the demand for oil, which pressure the price. Worthwhile to mention is the lower reported inventories from the EIA in yesterday’s session, which may support the price of oil.

At a glance, the interest rate hike might be a fundamental reason for a bearish-biased equities and commodities sector with a bullish-favored dollar. However, a potential halt in rate hikes changes the parameters toward a potentially balanced behavior.

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