NEW YORK: Wall Street stocks were mostly lower early Thursday amid lingering angst over the banking sector as the European Central Bank forged ahead with a large interest rate increase.
Credit Suisse’s fortunes in the markets reversed following intervention by the Swiss central bank, but shares in some US regional banks plunged again, with First Republic Bank down more than 30 percent in early trading.
About 30 minutes into trading, the Dow Jones Industrial Average was down 0.6 percent to 31,677.89.
Wall Street tumbles as Credit Suisse sparks fresh bank sell-off
The broad-based S&P 500 declined 0.2 percent to 3,883.01, while the tech-rich Nasdaq Composite Index edged up 0.1 percent to 111,439.94.
The European Central Bank stuck to a planned half a percentage point interest rate increase as it remained laser-focused on fighting sky-high inflation despite market turmoil following last week’s rapid collapse of Silicon Valley Bank.
Alongside its sizeable hike, the ECB also said its policy toolkit would provide liquidity support to banks in the euro area financial system if needed.
The ECB’s move comes a few days before a closely watched rate decision by the Federal Reserve, with some analysts expecting the United States central bank to hold rates steady in the face of market turbulence.
Global financial markets have gyrated since SVB’s fall, with investors trying to suss out the scale of the problem and how it affects the monetary policy outlook.
“While we were able to bounce significantly off the lows yesterday, coming into a new day, we’re going to need some clarity,” Art Hogan from B. Riley Wealth Management said in an interview.
“So you get the ECB raising rates, and then the next question will be: What the Fed is going to do?” he said.
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