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UBS' planned takeover of Credit Suisse calmed the market slightly. Broader market conditions, however, still look unstable.

What you need to know today

• Despite the forced takeover of Credit Suisse by UBS — which was intended to stabilize the banking sector globally — First Republic Bank continued sinking Monday. The bank cratered another 47.11% after Standard & Poor's cut its credit rating to B+ from BB+.

• To stem the rout, JPMorgan Chase is advising First Republic on strategic alternatives such as raising capital or attempting a sale, sources told CNBC's David Faber.

• Other regional banks in the U.S., however, managed to rebound. New York Community Bancorp (which agreed to buy Signature Bank over the weekend) surged 31.65%, PacWest Bancorp jumped 10.78% and KeyCorp edged up 1.21%.

• U.S. markets staged a relief rally as all major indexes made minor gains Monday. Asia-Pacific markets rose on Tuesday too. South Korea's Kospi added 0.42% as the country's producer price index for February increased 4.8% year on year, a slight decline from the previous month.

• Japan's Prime Minister Fumio Kishida is on his way to Ukraine for a surprise visit to Ukraine's President Volodymyr Zelenskyy, Japan's Ministry of Foreign Affairs confirmed. Kishida's unexpected trip overlaps with Chinese leader Xi Jinping's official state visit to Ukraine's nemesis, Russia and its leader Vladimir Putin.

• PRO Goldman Sachs' Chief Global Equity Strategist Peter Oppenheimer said European stocks will outperform those in the U.S., which will remain "fat and flat" even if markets rebound.

The bottom line

The "Minsky moment," named after the economist Hyman Minsky, is a sudden collapse of the market after a long period of aggressive speculation brought on by easy money. Markets might face a Minsky moment soon, warned Marko Kolanovic, JPMorgan Chase's chief market strategist and co-head of global research.

Markets haven't collapsed. Some bank stocks are in the doldrums, yes, but the SPDR S&P Regional Banking ETF, a fund of regional bank stocks, rose 1.11% on Monday. Major indexes were up yesterday too. The Dow Jones Industrial Average gained 1.2%, the S&P 500 added 0.89% and the Nasdaq Composite increased 0.39%.

But there are signs market instability is increasing. The banking crisis is causing regional banks — which account for around a third of all lending in the United States — to reduce their loans, said Eric Diton, president and managing director of The Wealth Alliance. In other words, the availability of money in the economy is slowing even without the Federal Reserve increasing interest rates.

Speaking of interest rates, analysts seem to think there's no good path forward for the Fed. An interest rate hike "would be a mistake," MKM Partners Chief Economist Michael Darda told CNBC. On the other hand, a pause would cause "panicked reactions by equity and bond investors," according to Nationwide's Mark Hackett. This suggests markets are already so jittery that whatever the Fed does — even if it's nothing — it might cause instability to spread.

With that in mind, investors might want to heed Kolanovic's warning that a Minsky moment could be on the horizon.  

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