- US equity futures slipped into the red Friday as fears over the US banking turmoil continue to rattle investors.
- The drop erases gains from the previous session as investors digested the Fed’s latest interest-rate increase.
- Fears over the financial health of European banks are also mounting, with Deutsche Bank shares slumping 8% following a spike in credit default swaps.
US stock futures slipped Friday as investors shifted their focus from the Federal Reserve’s interest-rate decision back to the lingering banking-sector instability.
All three US benchmarks turned lower, with the S&P 500, Nasdaq and Dow Jones falling 0.75%, 0.46% and 0.87%, respectively.
The losses follow a volatile trading session on Thursday as investors digested the Fed’s latest interest-rate hike and fresh concerns over the banking turmoil that started two weeks ago with the collapses of Silicon Valley Bank and Signature Bank, before spreading to Europe with the rescue deal for Credit Suisse.
The US central bank hiked interest rates by 25 basis points on Wednesday, representing its 9th consecutive interest rate hike since it started the tightening policy in March 2022, and Chairman Jerome Powell signaled that further increases could be necessary.
The drop in US equity futures also comes amid renewed jitters over the financial health of European lenders, with Deutsche Bank shares slumping 8% in pre-market trading following a sharp jump in the cost of insuring its bonds against the risk of default.