The “wall of worry” for investors grew significantly, with new concerns over bad loans at US regional banks causing global markets to stumble. This adds to existing anxieties over stretched AI valuations and geopolitical tensions.
The fresh panic was ignited by Zions Bancorporation and Western Alliance. The two lenders revealed a combined $150 million in bad loans and write-offs, sending their shares plunging and raising broader questions about credit quality in a high-rate environment.
The anxiety spread like wildfire. European markets saw steep losses, with the FTSE 100, Dax, and others falling. The banking sector was hit hardest, losing over €37 billion in value as major players like Barclays and Deutsche Bank tumbled. Asian markets had already closed sharply lower.
This sell-off in equities was met by a surge in safe-haven assets. Gold posted its biggest weekly gain since the 2008 financial crisis, hitting a new record of $4,378 an ounce. The market’s “fear index” (VIX) also jumped, reflecting the growing unease.