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Equity Alert: US indices end lower after regional banks flag loan concerns 

MUMBAI--0730 IST--Stock indices in the US closed lower Thursday after regional banks flagged concerns about bad loans. Heavyweight artificial intelligence stocks also declined despite the world's largest chip company giving a bullish outlook on AI-related spending. The US market continued to be volatile after the US-China trade conflict showed signs of flaring up further. The volatility index for the US market jumped to its highest since May and 10-year US Treasury yields fell to settle below 4%, according to a CNBC report.

Shares of Zions Bancorp. declined 13% after the regional bank disclosed an unexpected loss on two loans in its California division, adding to growing investor unease about hidden credit stress as lenders navigate economic uncertainty with interest rates still relatively high, CNBC reported. Shares of Western Alliance fell nearly 11% after the company said it had initiated a fraud lawsuit against one of its borrowers. Uncertainty about commercial lending emerged after the collapse of US auto parts supplier First Brands and car dealership Tricolor in September.

"When you see one cockroach, there are probably more," Jamie Dimon, JPMorgan's chief executive officer was quoted as saying by CNBC, about the collapse of First Brands and Tricolor Holdings. Jefferies Financial Group, which has some exposure to First Brands, fell 10%, and has declined 25% so far in October.

Insurance industry bellwether Travelers Companies' September quarter revenue was below estimates and its stock fell nearly 3%. Insurer Marsh & McLennan posted flat operating margins for the same quarter and growth slowed in the company's risk and insurance business, according to a report by Reuters.

Taiwan Semiconductor Manufacturing, the world's largest manufacturer of advanced semiconductors, gave a bullish outlook for spending on artificial intelligence Thursday, but shares of heavyweight AI-related stocks fell, with Palantir and Meta Platforms down nearly 1% each. Shares of Tesla declined 1.5%. Hewlett Packard Enterprise fell 10% after the technology company's annual profit and revenue forecast came in well below Wall Street's expectations.

Meanwhile, shares of business software seller Salesforce rose 4% after the company estimated revenue of more than $60 billion for 2030, above Wall Street's estimates, Reuters reported. Trucking company JB Hunt's shares jumped 22% after the company reported strong September quarter profits.

Data showed the Philadelphia Fed Business Index for October declined 12.8 points, compared with a rise of 8.5 estimated by economists polled by Reuters. US Federal Reserve Governor Christopher Waller said Thursday that he supported an additional interest rate cut in October due to mixed readings on the state of the job market.

Trade tensions between China and the US resurged recently, adding to volatility in US markets. US President Donald Trump last week threatened to impose an additional 100% tariff on any goods coming from China in response to China's tighter export controls on rare earth minerals. 

Following are the closing levels of US indices Thursday:

(Eshitva Prakash)

End

US$1 = INR 87.82

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

All prices from National Stock Exchange, unless otherwise specified.

All percentage changes for share prices are rounded off to the nearest whole number; percentage changes for index values are rounded off to one decimal place.

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