How Regional Bank Turmoil is Stabilizing the Market.

The recent turmoil in regional banking has not only reduced broader stock market volatility but also helped lift the benchmark index, according to derivative strategists at Societe Generale. The S&P 500 is about 2.5% higher than in early March, and VIX is back below the 20 level. The bond markets have reacted to the turmoil by pushing yields lower on expectations that the banking problems will crimp credit and reduce the need for the Fed to keep interest rates higher for longer. The sensitivity to interest rates is not limited to the technology sector, and smaller and weaker companies are more likely to need to come to the market and pay higher costs/face tighter conditions.