Bank Woes Hit Stocks as Credit Fears Resurface; Gold Sets New Record – US Market Wrap
Stocks slipped, extending a weeklong bout of volatility on Wall Street, as fresh concerns over credit quality rattled investors and reinforced worries about the fragility of the $28 trillion bull market. Bitcoin slumped, while bonds and gold advanced as traders sought safety.
An early advance — fueled by yet another upbeat forecast for artificial-intelligence demand — fizzled after two regional banks disclosed bad loans, reviving unease about hidden stress in the financial system.
Zions Bancorp tumbled 13% after revealing a $50 million charge-off tied to a loan underwritten by its California Bank & Trust unit in San Diego. Western Alliance Bancorp sank 11% after admitting exposure to the same borrowers.
The renewed bank jitters surfaced just days after the collapse of subprime auto lender Tricolor Holdings, which triggered a $170 million charge-off at JPMorgan Chase & Co. in the third quarter. That hit helped lift the bank’s credit costs and prompted a warning from Jamie Dimon about rising financial strains. The flare-up comes amid renewed US–China trade friction and the uncertainty created by the US government shutdown, which has delayed key economic data.
The S&P 500 fell 0.6%, while a closely watched regional bank ETF plunged more than 6%. Oracle spiked after laying out ambitious margin expectations for its AI infrastructure business. Meanwhile, $3.4 trillion in options are set to expire Friday, according to Goldman Sachs Group, threatening to amplify market swings.
In fixed income, 10-year Treasury yields dropped below 4%, while two-year yields touched their lowest since 2022. Gold climbed to a record high, adding to a string of gains that have made it the year’s standout safe haven.
A series of Federal Reserve officials also weighed in. Governor Waller said policymakers can continue quarter-point rate cuts to shore up a weakening labor market, while Stephen Miran pressed for a more aggressive easing path.
Elsewhere, Taiwan Semiconductor Manufacturing extended its rally after projecting stronger demand linked to the AI infrastructure boom. From OpenAI to Oracle, industry leaders are racing to expand data-center capacity in the post-ChatGPT era. The upbeat forecast came a day after ASML Holding NV issued a similarly bullish outlook for chip-equipment orders.
