Markets fall on bank fears; bonds plunge

NEW YORK — Markets shuddered Wednesday on worries about a spreading banking crisis and how badly it will hit the economy, and stocks and bond yields fell on both sides of the Atlantic.

The S&P 500 sank as much as 2.1 percent before ending the day with a loss of 0.7 percent, while markets in Europe fell more sharply as shares of Switzerland’s Credit Suisse dropped to a record low. The Dow Jones Industrial Average lost 280 points, or 0.9 percent, after dropping as much as 725 points. The Nasdaq composite rose 0.1 percent after erasing a steep decline.

Markets trimmed their losses toward the end of the day as the Swiss National Bank said it could provide some assistance to Credit Suisse “if needed.”

But that came only after a steep drop for Credit Suisse rattled investors worldwide. Its shares in Switzerland sank 24.2 percent following reports that its top shareholder won’t pump more money into its investment. The bank has been fighting troubles for years, including losses it took related to the 2021 collapse of investment firm Archegos Capital.

“They’ve had issues,” said Anthony Saglimbene, chief market strategist at Ameriprise. “It’s just coming at a time when there’s more uncertainty and there’s less confidence in the banking system.”

Wall Street’s harsh spotlight has intensified across the banking industry recently on worries about what may crack next following the secondand third-largest bank failures in U.S. history over the last week. Stocks of U.S. banks tumbled again Wednesday after enjoying a brief, one-day respite on Tuesday.

The heaviest losses were focused on smaller and midsize banks, which are seen as more at risk of having customers try to pull their money out en masse. Larger banks also fell, but not by quite as much.

First Republic Bank sank 21.4 percent, a day after soaring 27 percent. JPMorgan Chase slid 4.7 percent.

Many analysts are quick to say the current weakness for banks looks nowhere near as bad as the 2008 crisis that torpedoed the global economy. But worries are nevertheless rising that pain spreading through the banking system could spark a downturn.

On Wall Street, companies in the oil and gas business had the sharpest stock drops. Helping to cushion the blow were gains for several Big Tech stocks. They’ve had their own struggles recently, but they tend to benefit from lower interest rates.

All told, the S&P 500 fell 27.36 points to 3,891.93. The Dow lost 280.83 to 31,874.57, while the Nasdaq rose 5.90 to 11,434.05.