The “wall of worry” for investors grew taller as new jitters about the US banking sector added to existing anxieties over AI valuations and geopolitics. The fresh concerns sparked a global market sell-off.
The panic was ignited by Zions Bancorporation and Western Alliance, two regional lenders that revealed significant bad loans. This raised alarms about credit quality after a long period of high interest rates.
The reaction was a sea of red across global markets. European indices like the FTSE 100 and Dax fell, dragged down by a €37.4 billion rout in bank stocks. Asian markets had already closed sharply lower.
This uncertainty sent investors fleeing to the safety of gold, which hit a new record high of $4,378 an ounce. The VIX “fear index” surged, signaling that “storm clouds are gathering” for the economy.