U.S. equities retreated on Thursday, relinquishing earlier advances as investor confidence was shaken by a downturn in financial shares amid mounting concerns over deteriorating loan quality. Skepticism also lingered over international trade relations and a continued government shutdown, further rattling market sentiment.
The Dow Jones Industrial Average declined by 301.07 points or 0.65%, to finish at 45,952.24. Meanwhile, the S&P 500 dropped 0.63% to close at 6,629.07—erasing gains set during earlier trading—while the tech-heavy Nasdaq Composite settled 0.47% lower at 22,562.54.
The sharpest losses emerged among banking stocks, with shares of Zions Bancorporation, Jefferies, and Western Alliance dragging the sector down. Investor unease grew as the industry contended with fallout from bankruptcy filings in the automotive sector.
Zions Bancorporation plunged 12% after announcing a $50 million loss tied to two commercial and industrial loans issued by its California business, a disclosure that rattled investors. Western Alliance shed nearly 11% after it revealed a legal challenge against Cantor Group V, LLC, alleging fraudulent activity. Meanwhile, Jefferies tumbled 9% following its investor day presentation; the investment bank has acknowledged its exposure to the now-bankrupt auto parts supplier First Brands. According to the company, Jefferies’ stock price has plummeted by more than 20% since First Brands filed for bankruptcy.
The persistent concerns surrounding lending standards, sector exposure, and broader macroeconomic uncertainty are contributing to heightened volatility, based on market sources.
