Dow, S&P 500, Nasdaq Set to Open Lower Amid Banking Sector Concerns
U.S. stock futures are pointing to a negative open Friday as investors react to concerns about potential loan losses within the banking industry. Dow Jones Industrial Average futures were down 407 points, or 0.9%, while S&P 500 futures were dropping 1.2% and Nasdaq 100 futures were falling 1.3%.
The anxieties were sparked by recent developments at Zions Bancorp and Western Alliance. zions Bancorp disclosed a $50 million charge-off late Wednesday related to loans from borrowers involved in legal disputes. Western Alliance revealed Thursday it filed a lawsuit in August alleging fraud by one of its borrowers.
“While this was an ostensibly isolated story at two banks each less than $10bn market cap, the event drew inevitable comparisons to the regional bank stress that followed the collapse of SVB [Silicon Valley Bank] in March 2023 and raised broader questions over potential credit quality issues,” noted Deutsche Bank analyst Peter Sidorov.
The yield on the benchmark 10-year Treasury stood at 3.950% early Friday, a slight decrease from the previous day’s close below 4% – a level not seen since April.
In other news, federal Reserve Governor Christopher Waller indicated Thursday that the central bank should consider a quarter-percentage-point interest rate reduction at its October meeting, citing a weakening labor market and the absence of recent economic data due to the ongoing government shutdown, which began October 1st and has delayed the release of key reports including the September employment figures and inflation data.
Contributing to the economic landscape, Brent crude futures, the international benchmark for oil prices, were down 0.3% early Friday at $60.89, reaching their lowest point since May, potentially easing inflation concerns.
Other Movers:
* Oracle: Shares are in focus following its quarterly earnings report.
* Nvidia & Micron: These semiconductor stocks are being watched amid broader tech sector volatility.
* Bitcoin: The cryptocurrency is experiencing a downturn, adding to the risk-off sentiment.
