Market Commentary: Friday 17th October

Stocks fell further as investors turned to safe havens after regional bank shares in the U.S. tumbled on fears of deteriorating lending standards following Tricolor’s collapse. U.S. equity futures dropped 0.7%, and Asian shares dipped 0.9%. Treasuries extended gains, with two-year yields hitting lows not seen since 2022, while gold and silver set fresh highs. The yen and Swiss franc strengthened, and the dollar slipped.

The bank stress is raising broader credit worries just as markets were already wrestling with risks from a government shutdown, elevated equity valuations, and re-escalating U.S.–China tensions. The S&P Regional Banks Index plunged 6.3%, its worst day since April. In Asia, Hong Kong and Chinese equities dropped over 1.5%, with tech names among the hardest hit.

The White House suggested it may ease tariffs on U.S. auto imports amid political pressure, even as Beijing and Washington continue to exchange threats over export controls and strategic technology.

Data-wise, we have Eurozone CPI this morning and potentially housing and price index data out of the U.S., although this could be delayed by the government shutdown.

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