The market movements are a “flight to safety” amid worries about the financial sector, said Art Hogan, an analyst at B. Riley Financial.”It feels as though there’s some cracks in the regional banks,” Hogan added.The broad-based S&P 500 slumped 1.9 percent to 3,918.32, while the tech-rich Nasdaq Composite Index slid 2.1 percent to 11,338.35.
SVB Financial Group, a Silicon Valley-focused financial company, disclosed Wednesday that it lost $1.8 billion following securities sales to raise funds, as it contends with declining customer deposits.The news came on top of an announcement the same day that crypto banking titan Silvergate plans to shut down in the face of cryptocurrency market turmoil.
Shares of SVB plunged more than 60 percent, while the banking sector as a whole was a sea of red. JPMorgan Chase dropped more than five percent. Investors are also feeling cautious ahead of Friday’s government jobs report, which will be scrutinized for its implications for monetary policy. Stocks have fallen this week following congressional testimony from Fed Chair Jerome Powell warning that the central bank could accelerate interest rate hikes depending on economic data.All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.