Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 16, 2025.
Jeenah Moon | Reuters
U.S. stock futures were slightly lower on Thursday night after the previous session saw a sell-off fueled by concerns about regional banks’ loan practices.
Futures tied to the Dow Jones Industrial Average slipped 84 points, or 0.2%. S&P futures and Nasdaq 100 futures both fell more than 0.3%.
In after-hours trading, Interactive Brokers Group fell more than 2% despite reporting strong quarterly results, and Oracle slipped more than 2% after the cloud computing giant gave analysts its long-term financial outlook. Drugmakers Eli Lilly and Novo Nordisk also moved lower after President Donald Trump during a briefing on fertility treatments suggested the administration was negotiating much lower prices for their blockbuster obesity drugs.
Each of the major U.S. stock indexes closed in the red on Wednesday, fueled by a significant decline in bank stocks late in the session. The Dow lost 301.07 points, or 0.7%, while the S&P 500 and the Nasdaq Composite settled down 0.6% and 0.5%, respectively.
Shares of several financial heavyweights and regional banking names fell after Zions and Western Alliance disclosed bad loans, which sparked worries about loose lending practices and fears that similar issues could arise. The SPDR S&P Regional Banking ETF (KRE), which has been down for four straight weeks, lost more than 6% during the session. Uneasiness in the banking sector has grown after the recent bankruptcies of two auto industry-related companies.
Friday will offer another chance to gauge how regional banks are faring, with a slew of companies set to report their earnings, including Comerica and Fifth Third, among others.
Wednesday also saw a jump in the Cboe Volatility Index, commonly referred to as Wall Street’s fear gauge, alongside moves lower in Treasury yields and the U.S. dollar. Gold prices rose to fresh records, on the other hand, suggesting continued interest in the safe-haven asset amid widespread uncertainty.
Liz Ann Sonders, chief investment strategist at Charles Schwab, said on CNBC’s “Closing Bell” Wednesday that the banking concerns come as there’s is a lot of “speculative froth” that has developed in the public market, with investors chasing stocks with riskier profiles like quantum computing, drones and unprofitable tech stocks.
“When you have that speculative froth and then you have sort of a bigger picture potential issue, those two can sometimes collide and cause an increase in volatility,” she said, noting that most of the so-called froth is not in the megacap names anymore, but rather in smaller pockets of the market such as the Russell 2000 index, which hit a fresh high on Wednesday.
Meanwhile, tensions about global trade and tariff policies, elevated market valuations amid the artificial intelligence boom and the effects of the ongoing U.S. government stoppage have also carried on unabated. The shutdown, which is in its third week, has resulted in an indefinite halt of crucial economic data releases from federal agencies.
This week, the S&P 500 is up nearly 1.2% as a strong start to the third-quarter earnings season props up equities. The 30-stock Dow Jones Industrial Average has added about 1% week to date, while the Nasdaq Composite has gained 1.6%.