Market Overview: Credit concerns trigger a sell-off in bank stocks, with S&P 500 futures down 1.4%

Due to market doubts about the credit health of regional banks in the United States, traders have been reducing risk positions, leading to a continued decline in the stock market, marking the end of this week's volatile trading. The sharp fluctuations in the market this week have exposed the vulnerabilities of a market close to historical highs. Investors are eager to seek safety, making bonds and safe-haven currencies the main beneficiaries.

The S&P 500 index has seen a decline for the second consecutive trading day, with futures contracts down 1.4%. Previously, two regional banks reported that they encountered suspected fraud in their loan business related to troubled real estate funds. European and Asian markets also followed the U.S. stock market's sell-off. The European bank stock index fell 2.7%, with all sectors experiencing declines, and Deutsche Bank's stock price plummeted by 6%.

U.S. Treasury bonds continued to rise, with the yield on the 10-year Treasury bond falling by 3 basis points to 3.95% on Friday. Gold prices fluctuated, while the yen and Swiss franc led gains among major currencies against the U.S. dollar.

These market movements highlight the growing concerns about the U.S. credit market, providing the clearest indication yet of the underlying tensions currently present on Wall Street. These concerns are also adding to an increasing list of worries for investors, which includes the U.S. government shutdown, fears of an artificial intelligence bubble, and renewed tensions in U.S.-China trade relations.

"This resembles symptoms of a late-cycle phase, and we can see traces of complacency in the lending standards," said Rafael Tuhin, head of capital markets strategy at Taikang Asset Management. "The stock market has already risen this year, and valuations are high, so there is a strong temptation to take profits and lock in gains made so far this year. Additionally, with the weekend approaching, today's market volatility may be amplified."

According to data compiled by S&P Global Market Intelligence, as concerns about the chain reaction triggered by the bankruptcy of auto parts supplier First Brands begin to spread in the lending industry, the short interest in the SPDR S&P Regional Banking ETF has risen from 18.4% of its float on October 8 to 30%. Short sellers borrow securities and sell them, betting that they can buy back these securities at a lower price later to profit.

Some analysts believe that Friday's market volatility is an instinctive reaction rather than a signal of systemic risk, and they argue that comparing the current situation to the early stages of the financial crisis is an exaggeration