Banking shares tumbled on Thursday after signs of major trouble emerged at two regional banks, adding pressure to stocks ahead of key U.S. jobs data. “It feels as though there’s some cracks in the regional banks,” said Art Hogan, an analyst at B. Riley Financial, describing the market’s “flight to safety” amid worries about the financial sector.
The Dow Jones Industrial Average fell 1.7 percent to 32,254.86, the broad‑based S&P 500 slumped 1.9 percent to 3,918.32, and the tech‑rich Nasdaq Composite Index slid 2.1 percent to 11,338.35.
SVB Financial Group, a Silicon Valley‑focused financial company, disclosed on Wednesday that it lost $1.8 billion after selling securities to raise funds as customer deposits declined. The news arrived alongside an announcement that crypto‑banking titan Silvergate would shut down amid cryptocurrency market turmoil. Shares of SVB plunged more than 60 percent, and the banking sector as a whole turned red, with JPMorgan Chase dropping over five percent.
Investors are also cautious ahead of Friday’s government jobs report, which will be scrutinized for its implications for monetary policy. Stocks have fallen this week following congressional testimony from Fed Chair Jerome Powell, who warned that the central bank could accelerate interest‑rate hikes depending on economic data.
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