The S&P 500 traded up more than 1% from its lows on Wednesday as news broke that Swiss officials are discussing ways to intervene and help Credit Suisse Group CS according to Bloomberg.
The overall stock market took a nosedive Wednesday morning as concerns grew regarding Credit Suisse's financial situation. The Saudi National Bank, one of Credit Suisse’s main investors, said it would not purchase any more shares of Credit Suisse. Credit Suisse requested help from the Swiss National Bank after losing a significant amount of share value.
Credit Suisse’s stock traded down more than 20% premarket, dragging the Dow Industrial Average and other indices down with it. The fears regarding the bank’s financial situation come off the heels of Silicon Valley Bank’s collapse last week, leading many investors to worry about the banking sector as a whole.
In addition to the news that Swiss regulators are working with Credit Suisse to find a solution, the Producer Price Index came in lower than expected Wednesday morning, a sign that inflation is falling. As a result, the expectations for another rate hike lowered, and CME’s Fed Watch tool now shows a 60% chance of no rate hike at all.
Between the news regarding a Credit Suisse solution and the potential for no rate hike, some investor fears have subsided and the S&P 500 is well off of its lows of the day.
Price Action: The SPDR S&P 500 Trust SPY opened at $385.85 and reached a low of $383.72 Wednesday afternoon before rebounding. The broad market index closed down just 0.62% on Wednesday at $389.28.
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