Stocks move lower as regional banks face continued pressure ahead of Tuesday's close

Yahoo Finance markets reporter Ines Ferre examines losses seen across stock markets and the regional banking sector, while also looking at falling crude oil prices.

Video transcript

SEANA SMITH: All right, we are nearing the end of what has certainly been a down day on the Street. All three of the major averages trading to the downside, all off just about 1%. Some fear, some questions about the stability of the banking sector. Some of the turmoil that we've seen in regional banks is really dictating today's action. And Ines Ferre is here with a closer look at the losses we're seeing. And, Ines, it's pretty much across the board.

INES FERRE: Yeah, that's right, turmoil across the board. So let's start out with what's been happening with Treasury yields because we have been seeing movement on those yields to the downside, especially on the shorter end of the curve. So most of the action that we saw, a lot was on the two-year, on the three-year, down 17 basis points. Also, the five-year down as well and the 10-year. Now, when you see that shorter end movement, that's basically when traders are predicting perhaps a deterioration of the economy, the anticipation perhaps that the Fed may have to pivot sooner than it thinks.

Moving on to what's been happening with the bank stocks, the banking turmoil that we have seen recently. I'm going to pull up a chart of the regional banks here. So you saw that First Republic was acquired yesterday by JPMorgan Chase. We spoke to a lot of experts saying, OK, this crisis has been contained. JPMorgan CEO Jamie Dimon saying that the crisis is over.

But obviously, when you see this movement with the regional banks, the market may not be thinking that this crisis is over. So you're seeing the regional banks severely under pressure. And you're seeing a little bit of bifurcation, a little bit of divergence between the big banks and the regional banks. Big banks today under pressure as well, except not as much as the regionals.

So where are investors going to today? Well, let me pull up the Dow right here. You can see little bit of spots there in green, and these are some of the defensive names. You've got J&J. During a recession, you need health care. You've got Merck that's also up more than 1%. And if you're going to go to a restaurant, you may be going to a lower end restaurant. You may be going to a McDonald's. So you're seeing McDonald's that is not under pressure as much as some of these other stocks. Also getting a bid today is Bitcoin and gold as well, guys.

AKIKO FUJITA: And meanwhile, Ines, we are seeing oil prices hitting a five-week low today. Brent crude here down about 5%. What's dragging down the sector?

INES FERRE: Yeah, look, it's the same as the banking crisis, the uncertainty-- uncertainty about a recession. Crude futures, as you mentioned, WTI, you can see this drop off here, down 5%. Brent crude as well. Analysts had been saying at the time when OPEC+ had announced those cuts, you remember those cuts that they announced back in April, that OPEC+ was getting ahead of a recession where they were seeing demand would be dropping off. So that was preemptive ahead of a recession. But those gains that we saw immediately after OPEC+ announced that production cut, those gains have been erased.

BP did report its quarterly results, mixed results. Revenue grew 14%. You saw that their earnings decreased 13% year over year. Now, some interesting commentary, though, from BP regarding oil prices. It's saying that oil prices will be elevated in the second quarter as it expects those production cuts that were announced by OPEC+ to take effect, and also China to continue reopening. So that should tighten that supply and demand spread.