On Thursday, global markets experienced a slump in shares as the Dow Jones Industrial Average fell by 0.8 percent to 33,254.71, and the S&P 500 dropped by 0.4 percent to 4,119.51. The tech-heavy Nasdaq Composite Index also slipped by 0.2 percent to 12,285.10, all in early morning trading. This comes as regional bank PacWest experienced a 9.5 percent drop in deposits in the week of May 5th, with total deposits falling by 16.9 percent in the first quarter. The news follows reports that the bank was exploring strategic options, which caused fear among customers over the safety of their funds.
PacWest's shares plummeted by 28.8 percent on Thursday morning, triggering weakness in several other regional banks. The drop in PacWest's deposits has raised concerns about the stability of the financial sector. Customers have expressed concerns about the safety of their deposits, which has fueled the decline in PacWest's stock and sparked fears of a potential bank run.
The decline in shares on Thursday morning coincided with the release of disappointing second-quarter results from Disney, whose shares dropped by 8.4 percent. However, traders also assessed a moderation in producer price inflation, and the initial jobless claims hit the highest level since late October 2021. This has led analysts to suggest that the Federal Reserve may be inclined to hold interest rates steady when it meets again in June.
Despite this, there are growing concerns that the labor market is becoming less tight. The initial claims report indicates that there is a decline in the number of individuals who are seeking employment, which may have significant implications for the US economy.
