US stocks retreat due to renewed fears over US regional bank loan losses. Gold surges to a new record high. Oil and the US dollar weaken further.
U.S. regional bank woes spark stock market sell-off, Gold hits record high, US dollar weakens
Key takeaways
- Renewed concerns over U.S. regional banks, sparked by loan losses at Zions Bancorporation and Western Alliance, triggered a market sell-off, with the Russell 2000 plunging 2.1% and the S&P 500, Dow, and Nasdaq all retreating.
- Gold surged to a fresh record high of US$4,380, driven by safe-haven demand amid financial instability fears and the ongoing U.S. government shutdown.
- Oil and the U.S. dollar weakened, with WTI crude hitting a five-month low on oversupply fears and the dollar sliding for a fourth straight session as markets priced in deeper 2026 Fed rate cuts.
A rising fear of an inherent systemic risk in the US regional banks wiped out the earlier intraday gains seen in the major US stock indices at the start of Thursday, 16 October, US session. The worst-hit was the small-cap Russell 2000, which tumbled by 2.1%, followed by the S&P 500 (-0.6%), Dow Jones Industrial Average (-0.6%), and Nasdaq 100 (-0.4%).
Two U.S. regional banks, Zions Bancorporation and Western Alliance Bancorp, reported yesterday that their balance sheets were facing a sizable charge due to bad loans. The recent bankruptcies of two auto industry-related companies, First Brands and Tricolor Holdings, have raised concerns about loose lending practices, especially in the opaque private credit market.
The Nasdaq 100 fared better due to the positive performances of mega-cap semiconductor stocks that bucked against the overall bearish trend of the US stock market. Nvidia rallied by 1.1%, reinforced by a revenue projection upgrade for 2025 from Taiwan Semiconductor Manufacturing, a key player in the global semiconductor supply chain.
Asia Pacific stock markets followed Wall Street’s bearish sentiment, where all of them traded lower in today’s Asia session except for South Korea’s KOSPI 200 with a modest gain of 0.1%. Japan’s Nikkei 225 dropped by 1.5%, Hong Kong’s Hang Seng Index shed 1.8%, on track to end the week with a loss of 3.3%, and Singapore’s Straits Times Index declined by 0.6%.
In the absence of the release of key US economic data, such as retail sales, producer prices, and weekly jobless claims, due to the ongoing US government shutdown since 1 October, Gold (XAU/USD) has continued to trade in a bullish acceleration phase, reinforced by the “debasement trade” narrative.
Gold (XAU/USD) rallied by 2.8% on Thursday, 16 October, and added an intraday gain of 1% in today’s Asia session to print another record high of US$4,380 at the time of writing.
West Texas crude oil is on track for its third consecutive weekly loss due to oversupply fears reinforced by a potential ceasefire between Russia and Ukraine that could lead to the removal of sanctions on Russian oil. In today’s Asia session, WTI crude extended losses by 0.3% to hit a five-month low of US$57.30/barrel.
Rising Fed rate cuts bets in 2026 continued to put downside pressure on the US dollar, where the US Dollar Index declined for the fourth consecutive session and broke below its 20-day moving average in today’s Asia session with an intraday loss of 0.3% led by strength seen in the JPY (0.4%), and CHF (0.4%) against the greenback at the time of writing.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
