Stocks stay in the red as Credit Suisse crisis drives investor fear
Stocks remained down Wednesday afternoon as deepening troubles in the banking sector continued to roil markets.
The Dow was down 350 points, or just over 1%. The S&P 500 slipped by 1%, while the Nasdaq Composite lost 0.8%.
Shares of Swiss lender Credit Suisse tumbled over 20% after its biggest shareholder said it wouldn't increase funding in the bank, setting off fears about the strength of one of the world's biggest financial institutions. This comes just days after the collapse of Silicon Valley Bank and Signature Bank sent Wall Street into a frenzy.
It remains unclear how the two banks' collapses, and now the crash in Credit Suisse's stock, will affect global and US markets as well as the economy.
The CME FedWatch Tool shows that traders see a roughly 45% probability that the Fed won't raise interest rates at its meeting next week. Traders saw a 55% probability of a quarter-point rate hike.
CNN's Fear & Greed Index was at 18, indicating extreme fear in the market. That shows more fear has entered the market since this morning, when the index clocked in at 22.
Shares of US banks also continued their descent. Wells Fargo stock fell 4.8%. Shares of JPMorgan Chase were down 5.1%.
The bond market has seen heightened volatility as the turmoil in the banking sector roils the equity market. The ICE BofA MOVE Index, which measures volatility in the bond market, surged to levels last seen during the onset of the Covid pandemic in March 2020.
Bond yields fell Wednesday as skittish investors shaken by banking fears sought refuge in safe holdings.
The 2-year Treasury yield on Monday saw its biggest one-day drop since October 1987's Black Monday, and continued its descent on Wednesday. Long-term Treasury yields also fell.
