US indices experienced a significant downturn on Tuesday, with the S&P 500 losing more than 0.6% in a single session for the first time since March 22nd. The day ended with a 1.6% loss, with substantial losses in the financial sector. The Nasdaq 100 lost 1.9%. In Europe, indices varied, from a 1.2% loss for Spain's IBEX to a 0.4% gain for Switzerland's SMI. Paris' CAC40 fell by 0.56%, impacted by the global context and the release of several large dividends.

The US decline was sparked by renewed concerns for the banking sector, with First Republic at the forefront. The San Francisco-based institution lost half its value, dropping from $16 to $8.10 in a single day. Before the crisis in early March, the stock traded at over $120. The release of worsening results and massive cash outflows in the first quarter have shaken the market's fragile confidence. According to financial press reports, regulators are working with Wall Street to address this issue. In banking crises, confidence is crucial.

In contrast, the market is also reacting positively to Microsoft's results. The tech giant's share price surged 8.5% after the announcement. Investors had been anticipating bad news from tech leaders, but Microsoft and Alphabet have delivered solid results, with Alphabet's less impressive figures offset by a large share buyback program. Share buybacks remain an effective way for companies to communicate moderately positive news. Alphabet's stock rose 1.7% in after-hours trading. Meta Platforms will report later today, followed by Amazon tomorrow and Apple next week.

In corporate news:

  • Activision Blizzard - The company's shares fell 12 percent in premarket trading after the U.K. competition authority blocked a proposed $69 billion takeover by Microsoft.
  • Boeing said Wednesday it plans to increase production of its 737 MAX planes to 38 a month by the end of the year, while maintaining its annual cash flow target, as it tries to reassure investors about its delivery schedule. The stock was up 1.4 percent in premarket trading.
  • Microsoft on Tuesday reported January-March revenue that beat Wall Street expectations, led by growth in its cloud computing business and sales of its Office suite. The stock jumped 8.3% in pre-market trading.
  • Alphabet reported better-than-expected quarterly revenue on Tuesday, thanks to a rebound in advertising revenue and continued strong demand for its cloud services, and announced a $70 billion share buyback program. The stock was up about 4% in after-hours trading.
  • Alibaba - The cloud computing division of China's e-commerce and technology giant will cut prices on its products and services by 15 percent to nearly 50 percent starting Wednesday, as competition in the industry intensifies.
  • First Republic Bank was still under pressure Wednesday, down more than 15 percent in premarket trading, after reporting earlier this week more than $100 billion in first-quarter deposit outflows.
  • Visa reported better-than-expected quarterly profit on Tuesday and said it expects continued growth in its payments business as the expected recession is likely to be milder than expected.
  • Texas Instruments said Tuesday it expects second-quarter revenue and profit to fall short of Wall Street expectations as a slowdown in demand spreads to most of the company's markets. The stock was nevertheless up more than 1% in pre-market trading on the back of a better-than-expected first quarter.
  • Chipotle Mexican Grill on Tuesday reported better-than-expected first-quarter profit and sales on the back of higher menu prices and the opening of 41 new restaurants.
  • Hilton on Wednesday raised its annual adjusted earnings-per-share forecast on the strength of demand as tourism recovers.
  • Meta Platforms, Ebay and Mattel are scheduled to report first-quarter results after the close of Wall Street.
  • Citigroup announced on Wednesday the appointment of Mark Woodruff as chief executive of its Australian subsidiary.
  • CME Group reported quarterly results as investors turned to the exchange operator's products to hedge against market volatility during the banking crisis in March.

Analyst recommendations:

  • CoStar: Needham & Co raised the target to $90 from $80. Maintains buy rating. 
  • First Merchants: Raymond James cut the target to $38 from $43. Maintains outperform rating.
  • Lakeland Financial: Raymond James cut the target to $66 from $74. Maintains outperform rating. 
  • Paccar: Credit Suisse raised the target to $84 from $75. Maintains neutral rating. 
  • Prologis: Argus Research Corp initiated coverage with a recommendation of buy. PT up 13% to $136.
  • Microsoft: Macquarie upgrades to outperform from neutral. PT up 18% to $325.
  • The Scotts Miracle-Gro: Barclays downgrades to equal-weight from overweight. PT up 1.8% to $70.
  • Tenet: Raymond James raised the target to $85 from $72. Maintains strong buy rating. 
  • Tesla: Jefferies cut the recommendation to hold from buy. PT up 15% to $185.
  • Vicor: Needham & Co cut the target to $55 from $65. Maintains buy rating.