Shares of banks and other financial institutions fell sharply as a resurgence of credit fears offset strong earnings from the sector.
Regional bank Zions Bancorp dropped by more than one-tenth after disclosing an unexpected loss on two major loans, the latest sign of hidden credit stress as lenders navigate economic uncertainty.
Meanwhile, Western Alliance said it filed a lawsuit in August against one of its borrowers, alleging the company committed fraud.
Other regional lenders, such as Comerica and Fifth Third Bancorp, who recently agreed to merge, fell in sympathy.
Shares of Jefferies Financial, whose losses on loans related to bankrupt auto-parts maker First Brands triggered the credit scare, fell by roughly 10%.
JPMorgan Chief Executive Jamie Dimon rattled market confidence when he responded to the bankruptcy of auto lender Tricolor by warning: "when you see one cockroach, there are probably more."
The SPDR Select Sector Financial exchange-traded fund, which tracks the financial industry group of the S&P 500, fell by 2.8%, the biggest loss since the trade-war scare in April.
Shares of custodian bank Bank of New York Mellon slipped after it posted higher third-quarter profit, boosted by a surge in net interest income and fees revenue.
Brokerage Charles Schwab logged earnings growth amid a surge in retail-investment activity.
Federal Reserve officials are divided over the next move even as the government shutdown deprives officials of the data points that could clarify the balance between inflation and economic-slowdown risks.
U.S. Bancorp notched a rise in earnings for the latest quarter thanks to record revenue and loan growth.
Property-and-casualty insurer Travelers slipped after its earnings growth lagged some investors' expectations.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
October 16, 2025 17:25 ET (21:25 GMT)
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