Current:Home > MarketsStocks drop as fears grow about the global banking system -AssetScope
Stocks drop as fears grow about the global banking system
View
Date:2025-04-16 13:55:33
Stocks tumbled on Wednesday as fears grew that the banking turmoil sparked by the recent collapse of two U.S. banks will widen and spread globally.
The Dow Jones Industrial Average ended down nearly 0.9%, or nearly 300 points, after tumbling well over 1% earlier in the day. The S&P fell 0.7%.
Markets have reeled since the twin failures of Silicon Valley Bank and Signature Bank forced U.S. regulators to take emergency measures on Sunday to protect deposits at both lenders.
But the government's attempt to restore confidence in the banking sector has yet to work as investors remain deeply worried about the financial health of other banks.
Those fears are now going global.
On Wednesday, the catalyst for the Wall Street drop was a steep fall in shares of Credit Suisse, the second-largest Swiss lender, which once had big ambitions to become a top investment bank.
Shares of Credit Suisse had already been reeling over a number of controversies and poor financial results that have led to an exodus of customers. Last year, it announced a major restructuring plan that included nearly 10,000 layoffs.
Investors got even more spooked about the Swiss bank's financial health after the chairman of its biggest shareholder, Saudi National Bank, told Bloomberg News that the lender would not increase its nearly 10% investment in Credit Suisse.
Credit Suisse fails to reassure investors
Karen Petrou, managing partner at Federal Financial Analytics, a consulting firm based in Washington D.C., said she expects Credit Suisse will be rescued by Switzerland if needed, but added any failure could have major ramifications given how inter-connected the lender is across the globe.
"If Credit Suisse were to fail, you would see significant problems," she said. "All sorts of exposures would come unglued."
Switzerland's central bank, the Swiss National Bank, stepped in late on Wednesday during U.S. hours with an offer to provide financial support to the beleaguered lender, if needed. The announcement helped pare some of the losses in U.S. stock markets.
Credit Suisse then said it would borrow up to 50 billion Swiss francs, or about $54 billion, from the SNB.
The earlier drop in Credit Suisse's share price had sparked sharp falls in rival banks, and in European markets broadly, as global investors continued to worry about the stability of the banking system overall.
The largest banks in the U.S. were also hit on Wednesday. Shares of J.P. Morgan Chase and Goldman Sachs each fell by more than 3%.
Meanwhile, smaller, regional banks, which staged a comeback on Tuesday, also saw their stock prices resume falls. San Francisco-based First Republic Bank declined more than 20%.
veryGood! (73)
Related
- 'Most Whopper
- Jeff Bezos, Lauren Sánchez's engagement party was a star-studded affair in Beverly Hills
- Minibus taxi crashes head on with truck in Zimbabwe, leaving 22 dead
- China’s state media take a new tone toward the US ahead of meeting between their leaders
- 'Squid Game' without subtitles? Duolingo, Netflix encourage fans to learn Korean
- Jury convicts Wisconsin woman of fatally poisoning her friend’s water with eye drops
- Target tops third quarter expectations, but inflation weighs on shoppers
- Spain leader defends amnesty deal for Catalan in parliament ahead of vote to form new government
- Civic engagement nonprofits say democracy needs support in between big elections. Do funders agree?
- Three arrested in a shooting at a Texas flea market that also killed a child and wounded 4 others
Ranking
- Small twin
- No one will miss the National Zoo pandas more than Antwon Hines, their former mascot
- Courteney Cox honors Matthew Perry with tribute to Monica and Chandler's 'Friends' love story
- Jerry O'Connell reacts to John Stamos writing about wife Rebecca Romijn in 'negative manner'
- Finally, good retirement news! Southwest pilots' plan is a bright spot, experts say
- Live updates | Israeli tanks enter Gaza’s Shifa Hospital compound
- Dutch government shelves plans to reduce flights from Amsterdam’s busy Schiphol Airport
- The Taylor Swift economy must be protected at all costs
Recommendation
What were Tom Selleck's juicy final 'Blue Bloods' words in Reagan family
Anchorage adds more shelter beds after unusually high amount of snow and record outdoor deaths
Mother of 6-year-old boy who shot teacher faces sentencing for marijuana use while owning a gun
NATO to buy 6 more ‘eyes in the sky’ planes to update its surveillance capability
Senate begins final push to expand Social Security benefits for millions of people
Energy Department tries to boost US battery industry with another $3.5 billion in funding
Step Inside Travis Barker's Thanksgiving-Themed Birthday Party Hosted By Kourtney Kardashian
Union workers at General Motors appear to have voted down tentative contract deal