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U.S. and Canadian stocks dropped on Wednesday as turbulence at Credit Suisse renewed fears of a banking crisis, while data hinting at economic weakness kept alive hopes of a less aggressive monetary policy move by the Federal Reserve in March.
U.S.-listed shares of Credit Suisse slid 24.3% to hit a record low, after the Swiss bank’s largest investor said it could not provide more financial assistance to the lender. Fuelling hopes of a less hawkish Fed policy, data showed U.S. retail sales fell 0.4% last month from a growth of 3.2% in January, while economists polled by Reuters had expected a contraction of 0.3%.
A separate report showed U.S. producer prices unexpectedly fell in February and the rise in prices in January was not as large as initially thought, offering some hopeful signs in the fight against inflation. The data comes at a time when the collapse of SVB Financial and peer Signature Bank had already fanned fears about the health of other banks, fuelling hopes that the Fed would steer clear of sharp rate hikes at its next meeting to ensure financial stability.
The yield on the 10-year Treasury notes fell to 3.47%, while that on the two-year note, which best reflects interest rate expectations, fell to 3.87% but was off session lows hit after the data.
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