Happy Friday, investors. Sometimes all it takes to send a bull market South is a good ol’ fashion banking crisis.
To be clear, we haven’t entered one yet. But that hasn’t stopped investors from reminiscing about the 2023 Silicon Valley Bank collapse in the last 24 hours.
Falling bank stocks
Investors once again sense not all is well with regional banks.
First, Zions Bancorp reported it had to write off $50 million in bad loans tied to borrowers facing legal troubles
Then, Western Alliance announced that it had filed a lawsuit in August that alleged one of its borrowers had committed fraud
The two banks’ stocks fell 13.14% and 10.81%, respectively, on Thursday.
The KBW Nasdaq Bank Index declined 3.64% on Thursday, bringing its year-to-date return to 12.96%, which happens to be exactly in line with the S&P 500.
That marked bank stocks’ worst day since President Trump’s “Liberation Day” tariff announcement.
The regional version of the banking index fared much worse, however, falling 6.3% Thursday.
That turned out to be the KBW Regional Banking Index’s biggest sell-off against the S&P 500 since March 2023, when Silicon Valley Bank collapsed in what turned out to be the third-largest bank failure in US history.
Western Alliance said in a statement it had “sufficient confidence” in its credit portfolio to affirm its guidance, according to a Wall Street Journal report.
Still, the backdrop for the banking sector was already fragile.
Two auto industry companies — First Brands and Tricolor Holdings — just went bankrupt, dragging shares of Jefferies down double-digits due to its exposure to the fallout.
During JPMorgan’s earnings call on Tuesday, CEO Jamie Dimon didn’t exactly calm the jitters as he discussed why he was more concerned than most about the current credit and financial outlook.
“When you see one cockroach, there are probably more,” Dimon said in reference to the auto loan companies going belly-up.
Wall Street banks like JPMorgan, Goldman Sachs and Citi are coming off stellar earnings results this week.
That strength, however, suddenly feels less robust in light of wobbling among the smaller regional peers.
"We've had a credit market bull market now for the better part of since 2010,” Dimon said.
“These are early signs there might be some excess out there because of it. If we ever have a downturn, you're going to see quite a few more credit issues.”
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Market snapshot
Elsewhere
🇨🇳China’s rare earth export controls complicates the trade outlook. The tensions come as Presidents Trump and Xi prepare for their first sitdown in six years this month in South Korea, and negotiations are expected to continue ahead of the meeting. (Bloomberg)
⚡AI data centers are building their own power plants. Tech companies aren’t waiting around for the archaic US grid to catch up to their ambitious energy plans. The “Bring Your Own Power” boom is emerging as a workaround to trying to get on the grid. (WSJ)
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Rapid-fire
Oil prices hit a five-month low as President Trump said he would meet Vladimir Putin to discuss ending the Ukraine war (WSJ)
Fed Governor Waller wants a quarter-point rate cut while Stephen Miran sees reason for a half-point move (CNBC)
Snowflake stock rallied after it unveiled a partnership with Palantir (Barron’s)
Taiwan Semiconductor reported record profits and raised its revenue outlook (Barron’s)
The K-shaped economy is rewarding investors and leaving everyone else behind (Pomp Letter)
The market is mispricing this business development name that’s yielding 13% (Best Ideas Club)
The US Chamber of Commerce sued the Trump administration over $100,000 H-1B visa fee (CNBC)
Institutional investors are more focused on gold than the Magnificent 7 (Opening Bell Daily)
On this day
🗓 October 17, 2013: The US debt-ceiling crisis that led to that year’s government shutdown ended with the passing of the Continuing Appropriations Act. 800,000 federal workers returned to work the same day.
Last thing
Just one of 53 days in the history of the VIX Index that the “fear gauge” ended above 25 on a day where the S&P 500 closed within 2% of its all-time high.
— #Luke Kawa (#@LJKawa)
8:44 PM • Oct 16, 2025
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About me
📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
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