S&P 500 index futures fell 1.3%. at the beginning of the session in Europe, continuing the negative trend from the previous day. The reason was the disclosure of two American banks – Western Alliance Bank and Zions Bank – which reported alleged fraud on the part of borrowers. As a result, the US stock volatility index, called the “fear gauge” on Wall Street, reached its highest level since April, at 28 points.
The declines on American stock exchanges quickly spread to European markets. The Stoxx Europe 600 index is down 1.6%, mainly due to declines in the banking sector. At the same time, investors focused their interest on safe assets, which resulted in an increase in the value of government bonds. The KBW regional banking index in the US lost 6.3%. on Thursday, adding to concerns about the situation in credit markets, especially after the recent problems of auto lender Tricolor and auto parts maker First Brands.
Pooja Kumra, interest rate strategist at TD Securities, noted that markets are currently very sensitive to any signals that may indicate problems in the banking or credit sector. “Everything is overvalued,” said the expert, emphasizing the tense atmosphere on the market.
Investors' anxiety is additionally fueled by the speculative bubble in the stock market of artificial intelligence companies, which has been the driving force behind record increases on American stock exchanges in recent months. Amid mounting problems, the yield on 10-year US Treasury bonds fell 0.02 percentage points to 3.96%, the lowest since April.
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The raw materials market also saw declines. The international benchmark Brent crude oil fell by 1.1%. , reaching a price of $60.44. per barrel. Gold, however, continues its upward trend – its value increased by 0.5%, reaching $4,347. per ounce, an 8 percent increase over the week. Experts indicate that the increase in gold prices is driven by growing economic concerns and expectations of further interest rate cuts by the Federal Reserve.
