Stocks fell on Wall Street Wednesday on concerns over the strength of the banks worsens on both sides of the Atlantic Ocean.
The S&P 500 fell 1.4% in early trading as markets in Europe tumbled further as shares of Switzerland’s Credit Suisse fell to an all-time low.
The fear of a widespread banking collapse it had dissipated on Tuesday knowing that inflation it had moderated its growth in February to “only” 6% in the US, partly due to strong government messages that it would support depositors (but not shareholders) saving in failed banks.
The situation has changed, with the collapse of Credit Suisse shares Wednesday morning.
The Dow Jones Industrial Average and the Nasdaq Composite also fell sharply at the open.
Credit Suisse shares plunged after reports that its largest shareholder it will not inject more money into the bank.
Three recent bank failures in the US have investors and the Credit Suisse news on their toes triggered new sales of bank shares in both the United States and Europe.
Before the session began, futures for the benchmark S&P 500 Index fell 1.7% and the Dow Jones Industrial Average fell 1.6%.
Large and medium-sized banks in Europe and the US collapsed dramatically before US markets opened up, particularly in Europe.
Confidence in the banking system has eroded andin a few days following the failures of Silicon Valley Bank on Friday and Signature Bank on Sunday.
Most of the pre-market declines in the S&P 500 early Wednesday were in regional banks, with Zion Bancorporation, KeyCorp, Commerce and Regions all down between 5% and 8%. Even the major banks have lost groundwith Wells Fargo, Bank of America and Citigroup falling between 3% and 4%.
Banks have been in trouble for most of the year the highest interest rates they make fewer people and businesses take out loanspart of the Federal Reserve’s goal in its effort to cool the economy and reduce four decades of high inflation.
Investors returned to the bond market on Wednesday, driving yields down again after rising slightly the day before. The 2-year yield fell again to 4.05% from 4.25% on Tuesday night and the 10-year yield fell to 3.53% from 3.69%.
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Source: Clarin
Mary Ortiz is a seasoned journalist with a passion for world events. As a writer for News Rebeat, she brings a fresh perspective to the latest global happenings and provides in-depth coverage that offers a deeper understanding of the world around us.