US stocks drop on worries about banks
[October 17, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks fell on Thursday, hurt by drops for midsized
banks as worries flare about the loans they’ve made.
The S&P 500 slid 0.6% in its latest up-and-down day after erasing a
morning gain. The Dow Jones Industrial Average dropped 301 points, or
0.7%, and the Nasdaq composite lost 0.5%.
Zions Bancorp. tumbled 13.1% after the bank said its profit for the
third quarter will take a hit because of a $50 million charge-off
related to loans made to a pair of borrowers. Zions said it found
“apparent misrepresentations and contractual defaults” by the borrowers
and several people who guaranteed the loans, along with “other
irregularities.”
Another bank, Western Alliance Bancorp, dropped 10.8% after saying it
has sued a borrower, alleging fraud. It also said it’s standing by its
financial forecasts given for 2025.
Scrutiny is rising on the quality of loans that banks and other lenders
have broadly made following last month’s Chapter 11 bankruptcy
protection filing of First Brands Group, a supplier of aftermarket auto
parts. The question is whether the hiccups are just a collection of
one-offs or a signal of something larger threatening the industry.
Thursday’s swings on Wall Street, where the Dow bounced from an early
gain of 169 points to an afternoon loss of 472, fit the pattern of the
week for stocks. They’ve been shaky since the end of last week, when
President Donald Trump shattered a monthslong calm in the U.S. stock
market by threatening much higher tariffs on China.
Thursday’s swoon erased an early morning gain driven by an encouraging
signal about the artificial-intelligence boom.
Taiwan Semiconductor Manufacturing Co. reported a bigger jump in profit
for the latest quarter than analysts expected. Chief Financial Officer
Wendell Huang also said TSMC expects “continued strong demand for our
leading-edge process technologies” going into the end of the year.
That’s important for the U.S. stock market because TSMC is a critical
player in the AI frenzy, making chips for such companies as Nvidia. And
Nvidia and other AI stocks have been central to Wall Street’s surge to
records this year, even though inflation is still high and the job
market is slowing.
AI-related stocks have shot so high that critics worry about a possible
bubble, like the one that imploded for dot-com stocks in 2000.
U.S. companies broadly are under pressure to deliver stronger profits
after the S&P 500 surged 35% from a low in April. To justify those
gains, which critics say made their stock prices too expensive,
companies will need to show they’re making much more in profit and will
continue to do so.
Travelers dropped 2.9% Thursday even though the insurer reported a
stronger profit for the latest quarter than analysts expected. Its
revenue fell short of forecasts.
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Trader Dylan Halvorsan works on the floor of the New York Stock
Exchange, Wednesday, Oct. 15, 2025. (AP Photo/Richard Drew)
 Hewlett Packard Enterprise fell
10.1% after detailing long-term financial targets that some analysts
found underwhelming.
They helped overshadow a 4% gain for Salesforce, which unveiled a
plan to deliver more than 10% in compounded annual revenue growth in
coming years.
J.B. Hunt Transport Services trucked 22.1% higher after the freight
company breezed past Wall Street’s profit targets in the third
quarter.
All told, the S&P 500 fell 41.99 points to 6,629.07. The Dow Jones
Industrial Average dropped 301.07 to 45,952.24, and the Nasdaq
composite sank 107.54 to 22,562.54.
In the oil market, crude prices swung lower after Trump agreed to
meet with Russia’s Vladimir Putin in Hungary in hopes of resolving
the war in Ukraine. The war has had the United States trying to cut
off purchases of Russian oil.
A barrel of U.S. crude gave up an early gain to drop 1.4% to $57.46.
Brent crude, the international standard, fell 1.4% to $61.06 per
barrel.
In stock markets abroad, indexes climbed across much of Asia and
Europe.
South Korea’s Kospi soared 2.5% on hopes that a trade deal may be
coming between Seoul and Washington. Samsung Electronics and
automakers Hyundai Motor and Kia Corp. were among the big gainers.
In the bond market, Treasury yields dropped as investors herded
toward investments considered safer. The yield on the 10-year
Treasury sank to 3.97% from 4.05% late Wednesday.
Gold also rose in the hunt for safer investments. It climbed 2.5% to
$4,304.60 per ounce, bringing its stunning gain for the year so far
to roughly 63%.
A report in the morning said manufacturing activity in the
mid-Atlantic region is unexpectedly shrinking. It’s one of the few
windows into the economy that the Federal Reserve has been getting
recently as it tries to figure out whether high inflation or the
weak job market should be the bigger concern for the economy.
The U.S. government’s shutdown is delaying important updates on the
economy, such as a weekly update on unemployment claims that
typically helps guide Wall Street’s trading each Thursday. A day
earlier, an important report on inflation was also delayed.
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AP Writers Teresa Cerojano and Matt Ott contributed.
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