U.S. Stocks Fall as Banking Sector Volatility Surges

U.S. bank stocks including Zions Bancorporation, Jefferies, and Western Alliance plunged Thursday as investors reacted to sector risks following exposure to two auto industry bankruptcies.

The selloff stemmed from credit concerns after First Brands and Tricolor Holdings filed for bankruptcy. Regional bank shares tumbled when Zions and Western Alliance disclosed substantial losses from bad loans, raising fears of systemic credit problems.

Major indices recovered from session lows but closed lower. The Dow fell 301 points (0.7%) to 45,952, the S&P 500 dropped 42 points (0.6%) to 6,629, and the Nasdaq declined 107 points (0.5%) to 22,562.

AI optimism failed to support the broader market. Chipmakers rallied early after TSMC, the world’s largest advanced semiconductor manufacturer, raised its full-year revenue forecast on strong AI demand. However, deteriorating U.S.-China trade relations undermined sentiment despite positive signals from major banks on economic resilience.

The Philadelphia Fed reported a sharp contraction in regional manufacturing activity for October.

Gold climbed above $4,379/oz as investors sought safety amid policy uncertainty, rate cut expectations, and geopolitical tensions.

Oil prices edged lower Friday, tracking toward a weekly loss after Presidents Trump and Putin agreed to meet in Hungary to discuss ending the Ukraine war.

The dollar weakened Friday as trade tensions and signs of U.S. economic softness reinforced expectations for additional Federal Reserve rate cuts.

Nifty Hits Near 4-Month High on Two Days of Consecutive Gains. The Nifty index extended its rally for a second consecutive session yesterday, climbing a healthy 261 points (1%) to close at 25585, marking its highest closing level since June 27, 2025. It has decisively surpassed the previous swing high of 25448. Looking forward, the immediate resistance level is now placed at 25669, while the swing high of 25448 is now expected to act as the new, crucial support. Key quarterly results from several large-cap companies are scheduled over the next few sessions and expected to steer short-term market performance.

Indian markets are expected to open a little subdued today on the back of weak global cues.

Source: HDFC Securities Prime Daily, 17 October 2025

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