Wall Street collapses amid Credit Suisse trouble

March 15 (Reuters) – U.S. stocks fell on Wednesday as the collapse of Swiss bank Credit Suisse fueled fears of a banking crisis and U.S. economic data gave hope for less aggressive monetary policy from the Fed.

US-listed Credit Suisse shares fell 17.5% after its biggest investor said it could not provide the lender with additional financial assistance.

Earlier in the day, statistics showing a 0.4% month-on-month drop in US retail sales in February boosted expectations for a less hawkish Fed monetary policy.

At the same time, the producer price index in the US increased in February by 4.6% year-on-year, against expectations of an increase of 5.4%. The collapse of US regional banks SVB and Signature Bank over the weekend has already raised concerns about the health of the entire financial sector, fueling hopes that the Fed will avoid a sharp rate hike at its March stability meeting.

Now, investors are leveling the odds of raising the rate by 25 basis points and keeping it at current levels after the March 22 Fed meeting.

Shares of large US banks such as JPMorgan Chase & Co, Citigroup and Bank of America Corp are down between 2.5% and 4.6%. “Any negative signal from any reputable institution, in this case Credit Suisse, will send a ripple wave across the financial sector,” said Michael James of Wedbush Securities.

The Dow Jones Index fell 1.86% to 31,558.51 points at 5:42 p.m. Moscow time, the S&P 500 index fell 1.75% to 3,850.85 points and the Nasdaq fell 1.45% to 11,262.28 points. The original message in English is available under the code:

(Amruta Khandekar and Shubham Batra featuring Shristi Achar)