Global Markets Decline, Gold Reaches Record high as US bank Concerns Escalate
october 18, 2025 – global stock markets fell sharply Friday, and gold prices hit a record high amid growing anxiety over the health of US regional banks. The downturn follows a week of increasing scrutiny on the sector, sparked by the recent bankruptcy filing of First Brands, an auto parts supplier.
the US regional banking industry came under the spotlight after First Brands filed for chapter 11 bankruptcy in late September due to creditor concerns. The company’s filing revealed liabilities of at least $10bn to $50bn against assets of $1bn to $10bn, stemming from what appeared to be risky off-balance-sheet financing.
Analysts point to potential wider implications. Richard Hunter, head of markets at Interactive Investor, noted, “There are increasing signs of storm clouds gathering over markets, with little relief from the building wall of worry.” He added that investors are already contending with factors like high valuations in the AI sector, a potential US government shutdown, and strained relations between Beijing and Washington.
derren Nathan, head of equity research at Hargreaves Lansdown, highlighted concerns about the broader economy, stating, “Despite growing hopes of further rate cuts this year, attention is turning to the underlying health of the economy, as emerging credit losses among America’s regional banks raised further questions about lending practices.”
Market volatility surged,with the VIX index – a measure of market expectations of volatility – jumping more than 22% on Thursday to its highest closing level since April,and rising a further 6% on Friday morning.
The concerns echo warnings issued earlier in the week by JP Morgan CEO Jamie Dimon, who predicted that further issues could emerge following the collapses of Tricolor and First Brands, stating more “cockroaches” could emerge.
