88 points, or 0.4%, were deducted from the 30-stock index. The Nasdaq Composite increased by 0.3% while the S&P 500 remained unchanged.
In order to ensure short-term liquidity, Credit Suisse said overnight that it will borrow up to $54 billion from the Swiss National Bank. After news that Credit Suisse’s largest investor, the Saudi National Bank, would not offer further support, the troubled bank Wednesday hit a record low. Following an almost 14% decline in the previous session, U.S.-listed shares were down 1.7% on Thursday.
Regional banks had yet another leg down as a result of the news, which was insufficient to allay Wall Street’s worries about an imminent crisis. The First Republic Bank decline of more than 33% contributed to a 2.1% decline in the SPDR S&P Regional Banking ETF (KRE).
In CNBC’s “Squawk Box,” Greg Fleming, CEO of Rockefeller Capital Management and former president of Morgan Stanley Wealth Management, said: “What’s also comparable to ’08 is the hunting in the market for who’s the most vulnerable next.” “And uninsured deposits have served as the proxy.”
The developments on Thursday came after Wednesday’s events involving Credit Suisse caused declines in other European banking equities and rippled across American markets. Following the closures of Silicon Valley Bank and TD Bank, investors have been keenly monitoring bank equities in recent days, worries about industry contagion have been raised by Signature Bank.
Investors from all across the world also reacted to the European Central Bank’s announcement of an additional rate increase of 50 basis points. As US investors get ready for the Federal Reserve policy meeting next week, a choice is made.
Greg Bassuk, CEO of AXS Investments, stated: “During the past week, developments in the banking industry have added a layer of trepidation surrounding investor confidence. Investors are finally connecting that back to the question of what it means for Fed policy and interest rates.