The Fed's tenth consecutive interest rate hike, the buyout of First Republic's assets by JPMorgan Chase & Co JPM and a hot April jobs report gave investors plenty to digest this week.
On Wednesday, the Federal Open Market Committee raised its fed funds target range by 0.25% to between 5% and 5.25%. The Fed said its future actions will remain data-dependent but hinted that it may pause interest rate hikes in June by removing the phrase "some additional policy firming may be appropriate" from its policy statement.
On Monday, the Federal Deposit Insurance Corporation brokered a buyout of failed bank First Republic by JPMorgan Chase as volatility in the regional banking sector continues. Shares of PacWest Bancorp PACW sold off sharply on Thursday after the bank said it was exploring strategic options, including a potential sale. The SPDR S&P Bank ETF KBE lost ground on fears the collapses of First Republic, Silicon Valley Bank and Signature Bank could spread further contagion in the banking sector.
Related Link: JPMorgan Chase Acquires Substantial Majority of Assets and Assumes Certain Liabilities of First Republic Bank
On Friday, the Labor Department reported the U.S. economy added 253,000 jobs in April, far above economist estimates of 180,000 new jobs. U.S. wages grew 4.4% year-over-year, while the unemployment rate ticked lower from 3.5% to 3.4%.
On Wednesday, Johnson & Johnson JNJ completed the spin-off of its Kenvue Inc KVUE consumer health business, pricing Kenvue's initial public offering at $22 per share.
Related Link: Johnson & Johnson and Kenvue Announce Pricing of Upsized Kenvue Inc. Initial Public Offering
Growth Is Paramount: Shares of mass media company Paramount Global PARA PARAA dropped more than 28% on Thursday after the company reported negative revenue growth in the first quarter and cut its dividend by nearly 80%.
In the week ahead, investors will get more quarterly reports from PayPal Holdings Inc PYPL on Monday, Occidental Petroleum Corporation OXY on Tuesday, Walt Disney Co DIS on Wednesday and JD.Com Inc JD on Thursday.
Analysts have cut their second-quarter S&P 500 earnings estimates by 0.8% since the end of March, according to FactSet.
Economic Numbers: Investors will get key economic updates on Wednesday when the U.S. Labor Department releases its April Consumer Price Index reading and on Friday when the University of Michigan releases its preliminary May U.S. Consumer Sentiment Index reading.
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