The US flag flies in front of the New York Stock Exchange on March 13. (Brendan McDermid/Reuters)
The Dow opened the day down more than 600 points on Wednesday as bank fears swept global markets.
The S&P and Nasdaq fell roughly 2% and 1.5%, respectively.
Shares of Swiss lender Credit Suisse fell more than 20% after its largest shareholder decided not to raise funding. That comes after the bank cited “material weakness” in its financial report on Tuesday and dumped executive bonuses.
US bank shares also fell, with Wells Fargo down 4.9% and JPMorgan Chase shares down 3.6%.
Wall Street continues to grapple with the nationwide banking turmoil, after the collapse of Silicon Valley Bank and Signature Bank rocked markets last week and early this week. While stocks recouped some of their losses on Tuesday, investors remain wary of the banking fallout and what it means for the Federal Reserve’s rate hike campaign going forward and the overall stability of the financial sector.
‘s Fear & Greed Index was at 22 as of Wednesday morning, indicating extreme fear in the market.
Markets also digested the latest economic data that gives an idea of the state of inflation. The producer price index, a metric that measures the prices companies pay for goods and services before selling them to customers, fell 4.6% in the 12 months ending in February.
At the same time, US retail sales fell 0.4% last month, showing that Americans cut back on spending in February after splurging the previous month.
Both data points suggest the Fed is making progress in its fight against inflation. CME’s FedWatch tool showed that traders see a 58.3% chance of a quarter point rate hike at the central bank meeting next week.
