Stock markets tumbled on Wednesday, as investors’ fears over the health of the banking industry resurfaced, and spread around the world, undoing a rally on Tuesday when the panic appeared to pause.
European markets were hard hit, with stocks of many of the region’s biggest banks falling sharply. Premarket trading in the United States also suggested that much of Tuesday’s gain could be swiftly erased, as anxiety persists about the fallout from the collapse of Silicon Valley Bank and Signature Bank, which were seized by regulators after suffering devastating runs on deposits.
The catalyst in Europe appeared to be Credit Suisse, the mistake-prone Swiss bank that has struggled for years to turn around its fortunes, with customers steadily shifting their assets to rival banks. It recorded the most eye-catching decline, with its shares losing more than 20 percent, setting yet another record low. On Wednesday, the bank’s largest shareholder, Saudi National Bank, ruled out providing more money for Credit Suisse as it struggles with its latest turnaround plan.
The plunge in Credit Suisse’s shares triggered temporary halts in its trading. Shares of France’s Société Générale and BNP Paribas fell about 10 percent. The broad-based Stoxx 600 index fell by more than 2 percent, dragged down by the banks.
Futures for the S&P 500 were 1.8 percent lower, which implied that at the open of trading all of the previous day’s gains would be reversed. Shares of U.S. banks were mixed in premarket trading.