NEW YORK: Wall Street closed lower on Thursday (Oct 16), with fresh concerns about regional banks adding to investor unease over renewed US-China trade tensions.
Shares of Zions Bancorporation tumbled after the regional lender disclosed unexpected losses on two California loans, spooking investors already wary of hidden credit stress across the banking sector. Western Alliance also slumped after filing a fraud lawsuit against one of its borrowers, deepening concerns about the sector’s exposure to problem loans.
The S&P 500 financials index fell 2 per cent, while the insurance index dropped 3.5 per cent after Travelers reported quarterly revenue below expectations. Marsh & McLennan also declined after posting flat margins and slowing growth in its risk and insurance business.
US-CHINA TENSIONS ADD PRESSURE
Markets also remained focused on Washington–Beijing tensions after President Donald Trump threatened to impose 100 per cent tariffs on Chinese imports from Nov 1, following China’s export curbs on rare earths.
“With the added uncertainty of US and China trade and increased rhetoric and what that could mean for the economy and for the markets, I think that’s adding to market instability,” said Tom Hainlin, investment strategist at US Bank Wealth Management in Minneapolis.
AI BOOST FADES
An early rally in chipmakers, lifted by TSMC’s upbeat forecast for artificial intelligence-related demand, faded later in the session. AI-linked heavyweights including Palantir, Tesla and Meta Platforms lost ground, erasing earlier gains.
At the close, the Dow Jones Industrial Average fell 298.48 points, or 0.65 per cent, to 45,954.83, the S&P 500 lost 42.10 points, or 0.63 per cent, to 6,628.96, and the Nasdaq Composite dropped 105.77 points, or 0.47 per cent, to 22,564.31.
The CBOE Volatility Index (VIX) rose 2.17 points to 22.81, reflecting heightened investor caution.
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