US open: Stocks dragged lower by losses for bank index

Wall Street's main stock market gauges got off to a weak start on Thursday as investors continued to mull a 25 basis point rate hike by the Federal Reserve the night before.

Investors were also closely monitoring another session of sharp declines in the banking sector.

At 1524 BST, the Dow Jones Industrial Average was lower by 0.99% to 33,091.49 points, alongside a 0.84% decline for the S&P 500 to 4,057.74.

The Nasdaq Composite meanwhile was down by 0.68%.

In parallel, the KBW Bank sector index was trading lower by 5.53% to 70.68.

PacWest Bancorp shares were down 45% after disclosing overnight that it was considering its strategic options, including a sale.

Victoria Scholar, head of investment at Interactive Investor, noted that PacWest sought to reassure investors by saying it had not suffered out-of-the-ordinary deposit outflows, unlike rival First Republic Bank, which saw depositors withdraw $100bn.

"Less than two months ago, PacWest received a $1.4 billion cash injection from Atlas SP Partners following the collapse of SVB, which sparked negative reverberations across the sector," she said.

"Earlier this week First Republic Bank was rescued by JPMorgan with the Wall Street lender’s CEO Jamie Dimon commenting that ‘there may be another smaller one’ ahead, referring to a risk of another potential banking collapse.

"PacWest is the latest lender to fall victim to the turmoil in the US mid-cap banking sector with worried investors either cutting their holdings or adding to short positions which has punished its share price. PacWest has a heavy focus on commercial real estate lending, which has suffered on the back of the Fed’s aggressive rate hiking path after the longstanding punchbowl of cheap money was removed."

Elsewhere, Moderna was in focus after the pharmaceutical group’s first-quarter earnings and revenue beat analysts’ expectations.

Results are due from Apple after the close.