Key takeaways:
- Investors have been spooked by news of a run at Silicon Valley Bank, leading to a double-digit drop in pre-market trading and a more than 60% decline on Thursday.
- The news of SVB’s troubles has caused a ripple effect throughout the banking industry, with other bank stocks slipping in Thursday trading.
- The situation has been further complicated by the recent release of payroll figures, and investors are waiting to see how the situation will play out.
Investors have been spooked by news of a run at Silicon Valley Bank (SVB), the 16th largest bank in the United States, leading to a double-digit drop in pre-market trading on Friday and a more than 60% decline on Thursday. The trading of the bank’s shares was halted before markets opened on Friday.
The news of SVB’s troubles has caused a ripple effect throughout the banking industry, with other bank stocks slipping in Thursday trading. Investors are concerned about the odds of survival for the major startup lender, and the news this week that Silvergate, a much smaller bank largely focused on the cryptocurrency industry, announced plans to shut down has only added to the jitters.
The situation has been further complicated by the recent release of payroll figures, which showed an increase of 311,000 jobs last month, surpassing Wall Street’s expectations of 205,000 jobs added. However, investors found hope in smaller-than-expected wage gains, as slowing wage increases could be a sign of cooling inflation and may alleviate some pressure on the Federal Reserve to aggressively hike interest rates at its policy meeting later this month.
The news of SVB’s troubles has caused a great deal of uncertainty in the banking industry, and investors are waiting to see how the situation will play out. It remains to be seen whether the bank will be able to weather the storm and if the Federal Reserve’s upcoming policy meeting will provide any relief.
Be First to Comment