"Will the SVB crisis recur?" Closes lower amid concerns over regional bank distress [New York Stock Market Briefing]

Major indexes on the New York stock market closed lower as investor sentiment froze amid concerns over bad loans at U.S. regional banks.

On the 16th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 45,952.24, down 301.07 points (0.65%) from the previous day, the Standard & Poor's (S&P) 500 closed at 6,629.07, down 41.99 points (0.63%), and the Nasdaq Composite closed at 22,562.54, down 107.54 points (0.47%).

The Nasdaq in particular showed high volatility, initially rising with gains reaching 0.96% in early trading before reversing and widening losses to 1.17%.

However, the AI rally remained intact. That day TSMC reported strong results. TSMC announced that its third-quarter net profit was NT$452.3 billion (approximately 21 trillion won), marking a record high.

But in the afternoon, more regional bank troubles emerged, weighing on the market. Zions Bancorp said it took an accounting loss of roughly $50 million on commercial and industrial loans originated by its subsidiary California Bank & Trust. Another regional bank, Western Alliance Bancorporation (WAB), also announced it was unable to enforce a senior secured lien on the Cantor Group.

As a result, shares of Zions and Western Alliance plunged 13.14% and 10.81%, respectively. U.S. investment bank Jefferies also fell 10.62%.

The financials index also fell 2.75%.

All other sectors fell except for technology.

According to the CME FedWatch tool, in the federal funds futures market the probability of a 50bp rate cut in October reappeared for the first time in about a month. The probability of a 50bp cut was reflected at 5.3%.

The CBOE Volatility Index (VIX) jumped 4.67 points (22.63%) to 25.31 from the previous session.