US Bank Jitters Spark Global Market Sell-Off

Global stock markets tumbled, with Europe and Asia posting significant losses as signs of credit stress emerged from the US private credit market. The FTSE 100 in London and Germany’s Dax led the European decline, while Japan’s Nikkei and Hong Kong’s Hang Seng fell sharply in Asian trading.
The panic was sparked by two US regional lenders. Zions Bancorporation announced a $50m write-off on two loans, while Western Alliance reported legal action over a $100m bad loan, with one case involving alleged fraud. These disclosures sent their own shares plunging by around 10%.
The banking sector bore the brunt of the sell-off. In Europe, the pan-European banking industry lost over €37 billion in value. Barclays shares fell nearly 6%, while Deutsche Bank and Banco Sabadell also saw steep drops, wiping billions off their market caps.
This development unnerved investors, drawing immediate comparisons to the 2023 collapse of Silicon Valley Bank (SVB). Analysts noted that after a long period of high interest rates, markets are questioning credit quality. Investors fled to safety, pushing gold to a new record high of $4,378 an ounce as the “fear index” (VIX) surged.