Stock futures fell on Wednesday as pressure on the financial sector increased with shares of Credit Suisse, a Swiss Bank with large U.S. and global operations, tumbling more than 20%.
Futures tied to the Dow Jones Industrial Average fell 500 points, or 1.6%, while S&P 500 futures and Nasdaq-100 futures lost 1.8% and 1.6%, respectively.
In recent days, a crisis in the financial sector has centered around regional banks as Silicon Valley Bank and Signature Bank collapsed, both casualties of poor management in the face of eight interest rate hikes by the Federal Reserve in the last 12 months. Wednesday morning attention turned to the big banks with shares of Credit Suisse hitting an all-time low.
Saudi National Bank, Credit Suisse’s largest investor, said Wednesday it could not provide any more funding, according to a Reuters report. This comes after the Swiss lender said earlier this week it had found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.
At last check U.S.-traded shares of Credit Suisse were down 20.7% in the premarket.
As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup and Wells Fargo shed 3% each, while Goldman Sachs and Bank of America fell 2% apiece. The Financial Select Sector SPDR Fund lost 2.9% in premarket trading, giving up its 2% pop on Tuesday.
Regional banks, which rebounded Tuesday to lift sentiment for the broader market, fell back into the red again. The SPDR S&P Regional Banking ETF (KRE) was down 3% in the premarket, led by losses in