Stocks plunged lower on Friday after the sudden collapse of a top 20 bank, SVB, sent investors into a tizzy.
Wall Street’s fear gauge, the VIX, jumped 15% on Friday afternoon as investors rushed to safe havens to avoid being pulled into any banking sector contagion.
While shares of larger banks stabilized Friday after falling late on Thursday, smaller banks continued to suffer. An exchange-traded fund tracking regional banks, the SPDR S&P Regional Banking ETF, was down 4.4%.
The selloff sent the S&P 500 nearly negative for the year, erasing almost all previous gains.
Treasury yields, meanwhile, saw their largest decline since 2008, when Lehman Brothers collapsed, as investors flocked into bonds and away from the stock market.
The collapse of SVB upstaged what looked set to be the biggest news of the day — the February jobs report. Yet traders weren’t even sure how to process the “Goldilocks” data, which showed overly hot hiring at 311,000 jobs added, but respectable wage growth of 0.2% last month.
The Dow fell by 345 points, or 1.1% on Friday. The S&P 500 dropped 1.5% and the Nasdaq Composite was 1.8% lower.
For the week, The Dow fell by 4.4%, its worst week since June. The S&P 500 was down 4.6% and the Nasdaq was 4.7% lower.