The flag of the United States flies in front of the New York Stock Exchange on March 13. (Brendan McDiarmid/Reuters)
The Dow Jones index opened the day more than 600 points lower on Wednesday as banking concerns swept global markets.
The S&P and Nasdaq fell about 2% and 1.5%, respectively.
Swiss Credit Suisse shares fell more than 20 percent after the bank’s largest shareholder decided not to raise financing. It comes after the bank cited “material weakness” in its financial report on Tuesday and dumped executives’ bonuses.
US banking stocks also fell, with Wells Fargo down 4.9% and JPMorgan Chase down 3.6%.
Wall Street continues to grapple with nationwide banking turmoil, after the collapse of Silicon Valley Bank and Signature Bank that shook the markets last week and early this week. While stocks recovered some of their losses on Tuesday, investors remain wary of the banking fallout and what that means for the Fed’s rate hike campaign going forward and the overall stability of the financial sector.
The Fear and Greed Indicator was on CNN at 22:00 on Wednesday morning, indicating extreme fear in the market.
The markets have also digested the latest economic data which gives an idea of the state of inflation. The producer price index, a measure that measures the prices businesses pay for goods and services before selling them to customers, fell 4.6% in the 12 months ending in February.
Meanwhile, US retail sales fell 0.4% last month, showing that Americans cut back on spending in February after boasting the previous month.
Both data points indicate that 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 next week’s central bank meeting.
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