Market volatility surged, with the VIX “fear index” jumping over 22%, as bad loan woes at two US regional banks revived fears of an SVB-style crisis. The anxiety triggered a sharp sell-off in stocks across the globe.
Zions Bancorporation and Western Alliance plunged after reporting a combined $150 million in credit issues. This news raised “broader questions over potential credit quality issues” after a long period of high interest rates.
The sell-off was global. European markets like the FTSE 100 and Germany’s Dax fell sharply, while Asian markets like the Nikkei and Hang Seng had already closed lower. The banking sector was the hardest hit, with European lenders losing €37.4 billion in value.
Investors, seeking refuge from the turmoil, piled into safe-haven assets. This pushed gold to a new all-time high of $4,378 an ounce, its biggest weekly gain since the 2008 financial crisis.