Stock futures fell on Wednesday as pressure on the financial sector increased with shares of Credit Suisse, a Swiss Bank that has large U.S. and global operations, tumbling more than 20%.
Futures for the Dow Jones Industrials fell 543 points, or 1.7%, early Wednesday to 31,859.
Futures for the S&P 500 dipped 68 points, or 1.7%, to 3,886.25.
Futures for the NASDAQ Composite gave way 171.5 points, or 1.4%, to 12,165.50.
In recent days, a crisis in the financial sector has centered around regional banks as Silicon Valley Bank and Signature Bank collapsed, both casualties of poor management in the face of eight interest rate hikes by the Federal Reserve in the last 12 months. Wednesday morning attention turned to the big banks with shares of Credit Suisse hitting an all-time low.
Saudi National Bank, Credit Suisse's largest investor, said Wednesday it could not provide any more funding, according to a Reuters report. This comes after the Swiss lender said earlier this week it had found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.
At last check, U.S.-traded shares of Credit Suisse were down 20.7% in the premarket.
As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup and Wells Fargo shed 3% each, while Goldman Sachs and Bank of America fell 2% apiece. The Financial Select Sector SPDR Fund lost 2.9% in premarket trading, giving up its 2% pop on Tuesday.
Regional banks, which rebounded Tuesday to lift sentiment for the broader market, fell back into the red again, led by losses in Old National Bancorp, Zions Bancorp and Fifth Third Bancorp. To be sure, shares of First Republic Bank were clinging to gains.
In Japan, the Nikkei 225 index recovered nearly eight points Wednesday, while in Hong Kong, the Hang Seng jumped 1.5%.
Oil prices fell 94 cents to $70.39 U.S. a barrel.
Gold prices hiked $10.90 to $1,921.80 U.S. an ounce.