- The tumultuous week in financial markets ended with a rally in risk assets, possibly driven by short-covering, as regional banks recovered from a brutal sell-off and solid job data tempered fears of a recession. Treasuries dropped.
- The S&P 500's longest losing streak since February was ended by an equity rally. PacWest Bancorp surged more than 80% after its shares plummeted to a record low. Western Alliance Bancorp and First Horizon, which were also heavily impacted this week, both increased. The KBW Bank Index of financial heavyweights has risen from its lowest level since September 2020.
- The VIX, Wall Street's favourite volatility gauge, has ended a four-day surge to hover near 17. Apple strong earnings helped lift the megacap tech space, with the world's most valuable company rising nearly 5%. Hiring and wage growth in the United States accelerated in April, indicating labor-market resilience and inflationary pressures in the face of headwinds.
- President of the Federal Reserve Bank of St. Louis, James Bullard, said policymakers will likely have to raise interest rates to cool inflation, but he would wait and see what the data showed before deciding what move to support in June. Bullard also believes the Fed can still achieve a soft landing, with inflation returning to target without causing a significant downturn.
