U.S. stocks started the week on a somber note after suffering the aftereffects of the collapse of Silicon Valley Bank. U.S. regulators took control of SVB on Friday in a move to limit the effect of the tech-focused bank’s failure.
The S&P 500 declined by 1.1% on Monday, while the tech-heavy Nasdaq Composite index lost 1%. The Dow Jones Industrial Average edged 0.3% lower.
Bonds also felt the ripple of SVB’s failure, with the yield on the benchmark 10-year U.S. Treasury note falling to 3.48% on Monday. Two-year yields fell to 4.17%.
Following SVB’s failure, the U.S. government assured the public that the fallout would be minimal and would not affect the finances of taxpayers. Furthermore, Treasury Secretary Janet Yellen, Fed Chair Jerome Powell, and FDIC Chairman Martin J. Gruenberg announced that depositors who held accounts with SVB would be able to access their funds on Monday.
“Today’s Fed/Treasury decision to make all Silicon Valley Bank depositors whole is a good first step to reinstilling market confidence,” Nicholas Colas, Co-founder of DataTrek Research, observed.
British officials will also look to limit the impact of the bank’s failure in the UK, getting HSBC on board as a potential buyer for the UK arm of SVB.