Concerns over a banking crisis appear to have not subsided after a sell-off in regional bank stocks on Tuesday.
This was shown in the decline of Zions Bancorporation, Comerica and KeyCorp by more than 10% which was affected by the fear that more banks will fail after First Republic Bank.
It was previously reported that JPMorgan Chase has taken over First Republic Bank following its collapse last week.
However, it did not do enough to ease the concerns of investors who questioned the stability of smaller regional financial institutions after the crisis hit in March.
Although financial stocks were not the worst performers of the New York session, energy stocks also fell as investors reacted to the oil price slump.
At the close of the New York session, the Dow Jones Industrial fell about 367 points, or 0.89% to 33,684.54. While the S&P 500 ended 1.16% lower and the Nasdaq Composite fell 1.08%.
The US30 index slightly recovered from the previous fall to be at 33,708 in the Asian session.
At the same time, the risk that the United States will experience a 'default' also affects the performance of the stock market.
US Treasury Secretary Janet Yellen has warned that the government may run out of money and the situation will worsen if the debt ceiling fails to be raised before June 1.
Investors are now turning their attention to the FOMC policy meeting which is expected to see another interest rate hike of 25 basis points early Thursday morning.
