Dow drops 500 points as banking fears spread

New York (CNN) The Dow Jones opened the day down more than 500 points on Wednesday as banking fears spread across global markets, although the index pared losses to close the day down around 281 points, i.e. 0.9%.

The S&P and Nasdaq fell about 2% and 1.5% respectively earlier in the session. The S&P closed down around 0.7%, while the Nasdaq posted a slight gain for the day.

Stocks listed in New York (CS) beleaguered Swiss lender Credit Suisse had fallen 30% earlier in the day after its largest shareholder opted not to increase funding, after the bank cited ‘material weakness’ in its financial reports on Tuesday and stripped of executive bonuses.

Credit Suisse’s stock ended up closing around 24% lower. The Swiss central bank said on Wednesday evening that it was ready to provide financial support to Credit Suisse if needed.

Shares of US-based banks also fell: Wells Fargo (WFC) closed around 3.3% and JPMorgan Chase (JPM) the stock fell 4.7%.

Wall Street also continues to struggle with domestic banking tumult, after the collapse of Silicon Valley Bank and Signature Bank rocked markets last week and early this week. As stocks recouped some of their losses on Tuesday, investors remain wary of the banking fallout and what it means for the Federal Reserve’s interest rate hike campaign going forward and for overall stability. of the financial sector.

CNN’s Fear & Greed Index was at 22 Wednesday morning before dropping to around 20 by late afternoon, indicating extreme fear in the market.

Markets also digested the latest economic data giving insight into the state of inflation. The producer price index, a measure measuring the prices paid for goods and services by businesses before they are sold to customers, fell to 4.6% for the 12 months to February.

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Meanwhile, U.S. retail sales fell 0.4% last month, showing Americans cut spending in February after splurging the month before.

Both data points suggest the Fed is making progress in its fight against inflation. CME tool FedWatch showed traders are seeing a 58.3% chance of a quarter-point rate hike at next week’s central bank meeting.

In the wake of the Silicon Valley Bank collapse, the biggest U.S. bank failure since 2008, CNN is hosting a crisis special addressing what it means for banks and their customers around the world. Watch “Bank Bust: What’s Next for America’s Money” tonight, March 15, at 9 p.m. ET.

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