Asian stocks retreated on Friday, mirroring Wall Street losses, as growing concerns over U.S. regional banks fueled risk aversion. Bonds surged while gold prices hit a new record high amid heightened market volatility.
Shares of Zions Bancorporation plunged 13% after revealing a $50 million loss tied to loans from its California division. Western Alliance fell 11% following its lawsuit against Cantor Group V, LLC, alleging fraud. Analysts warned that despite containment, these incidents echo the vulnerabilities seen during the 2023 banking crisis. Tony Sycamore of IG noted that “where there is smoke, there is often fire,” signaling potential for renewed financial strain.
The turmoil sent investors rushing to safe-haven assets. The U.S. dollar weakened against major currencies, with the yen and Swiss franc both strengthening. U.S. Treasury yields fell sharply, with two-year yields dipping to 3.404%, a three-year low, as traders priced in expectations for at least two more Federal Reserve rate cuts this year. Gold touched a record $4,378 per ounce before flattening, still on track for a 7.6% weekly gain—its strongest since early 2020. Silver also climbed to a new high.
Global equity sentiment further deteriorated amid escalating U.S.-China trade tensions after Beijing rebuffed Washington’s criticism of its rare earth export curbs. MSCI’s Asia-Pacific index dropped 0.9%, Japan’s Nikkei fell 1%, and Hong Kong’s Hang Seng slid 1.4%. Taiwan’s market dipped despite TSMC’s upbeat AI-driven outlook.
Meanwhile, oil prices extended declines, with U.S. crude down 0.7% to $57.04 and Brent slipping to $60.63, following news of a planned Trump-Putin meeting in Hungary to discuss ending the Ukraine war.