Safe-haven assets surged, with gold hitting a new record and the VIX “fear index” spiking, as investors fled a broad market sell-off. The panic was triggered by renewed fears over the health of the US banking system.
The anxiety began after two regional lenders, Zions Bancorporation and Western Alliance, reported multi-million dollar bad loans. This sparked fears of a wider, systemic problem, drawing comparisons to the 2023 SVB collapse.
The sell-off in equities was global. Bank stocks were hit hardest, with European lenders losing €37.4 billion in value. Barclays and Deutsche Bank were among the biggest fallers. Asian markets like the Nikkei and Hang Seng also dropped sharply.
The VIX “fear index” surged over 22%, its highest close since April, while gold’s 8.5% weekly gain was its biggest since the 2008 financial crisis. This reflects a deep-seated anxiety about underlying credit quality.
