Stock market news today: S&P, Dow futures dip as pressure resumes on banks

Stock index futures pointed to a lower open Tuesday as regional banks found themselves on the back foot again.

S&P futures (SPX) -0.3%, Dow futures (INDU) -0.3% and Nasdaq 100 futures (NDX:IND) -0.3% were lower.

Financials (XLF) were the weakest sector before the bell.

Regional bank shares jumped early Monday, but lost momentum into the close. The SPDR Regional Bank ETF (KRE) fell 2% premarket today. PacWest (PACW) was off 13% and Western Alliance (WAL) was off 6%.

Rates were also down. The 10-year Treasury yield (US10Y) fell 3 basis points 3.48% and the 2-year yield (US2Y) fell 3 basis points to 3.98%. The exception continued to be T-bills in the crosshairs of a debt ceiling deadline. The 1-month yield (US1M) rose 14 basis points to 5.60%.

There was some more encouraging news on credit conditions after Monday’s SLOOS report showed banks continuing to tighten loan conditions.

The NFIB small business optimism index fell more than expected to 89 in April. But those finding credit hard to get fell to 6% from 9% in March.

“Four percent reported that financing was their top business problem,” the NFIB said. “A net 26% of owners reported paying a higher rate on their most recent loan.”

“The one unexpectedly bright spot – relatively – in the survey is the three-point dip in the proportion of respondents saying credit is harder to get, reversing most of the four-point spike in March, immediately after the SVB failure,” Patheon Macro’s Ian Shepherdson wrote. “Whether this marks the end of the credit tightening is another question altogether – we strongly suspect not – but for now it is a welcome development.”

But he also said the headline nubmer is consistent with a recession. Labor quality was the top business problem, followed by inflation, the NFIB said.

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