Bank stocks tumble; others rise expecting easing rates

Bank stocks tumbled Monday on worries about what's next to break, following the second- and third-largest bank failures in U.S. history. But many other stocks rose on hopes the bloodletting will force the Federal Reserve to take it easier on the hikes to interest rates that are shaking Wall Street and the economy.

The S&P 500 dipped 0.2%. The Dow Jones Industrial Average fell 90.5 points, or 0.3%, while the Nasdaq composite rose 0.45%.

The U.S. government announced a plan late Sunday meant to shore up confidence in the banking industry following the collapses of Silicon Valley Bank and Signature Bank.

Shares of First Republic Bank fell 61.8%, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

Huge banks, which have been repeatedly stress-tested by regulators following the 2008 financial crisis, weren't down as much. JPMorgan Chase fell 1.8%, and Bank of America dropped 5.8%.

At one point during the morning, a measure of fear among stock investors on Wall Street touched its highest level since October before falling back.

Prices for Treasurys shot higher as investors sought safety and as their expectations grew for an easier Fed. That in turn sent their yields lower, and the yield on the 10-year Treasury plunged to 3.54% from 3.70% late Friday. That's a major move for the bond market.

The two-year yield, which moves more on expectations for the Fed, had an even more breath-taking drop. It fell to 3.99% from 4.59% Friday. It was above 5% earlier this month.