Fear visibly returned to the market, with the VIX “fear index” surging over 22% and gold hitting a new record high as new jitters about the US banking system emerged. The panic was sparked by bad loan disclosures at two regional lenders.
The trigger came from Zions Bancorporation and Western Alliance, which reported a combined $150 million in credit issues. This news, while small, was enough to trigger a sell-off given the market’s anxiety about high 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.
Investors, seeking refuge, piled into safe-haven gold, which hit $4,378 an ounce. The episode revived memories of the 2023 SVB collapse, with analysts warning of “storm clouds gathering.”
