Equity markets tried to rebound on Wednesday but couldn't. Solid earnings from tech majors like Google and Microsoft and consumer favorites like Chipotle Mexican Grill were overshadowed by fear of growing bank contagion. The latest news from the First Republic scandal is the bank needs to raise more capital to avoid a government takeover, and the $30 billion deposited by the US largest banks may already be lost. With the FOMC slated to hike rates by another 25 basis points next week, the odds of another bank failure are growing.

Thursday could see another day of decline. The market is cheering the better-than-expected earnings season, but fear of recession is also growing. Reports from companies like UPS and Packaging Corporation of America are contrary to the strength shown by other companies and point to widespread economic slowing. The news of the week will come out tomorrow. The PCE price index is due at 8:30 AM and is a high-probability market-moving event.