U.S. Stocks Fall Amid Banking Jitters

People walk past a First Republic Bank in Manhattan on May 1.
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U.S. Stocks Fall Amid Banking Jitters

United States stocks tumbled on May 2 as the fallout from First Republic Bank’s failure continued to hit bank stocks and the Federal Reserve began debating its 10th rate hike this year. The S&P 500 closed 1.16 percent lower than it opened, while the Dow Jones Industrial Average tumbled more than 1.08 percent and the Nasdaq Composite dropped 1.08 percent.

Three of the top five biggest bank failures in U.S. history have occurred in the past nine weeks. Investors are concerned that more banks will fail if the Federal Reserve keeps hiking interest rates in its quest to fight inflation.

Falling dominoes: BlackRock ceo Larry Fink, head of the world’s largest asset management firm, asked in his annual letter to shareholders on March 15 whether “the dominoes” are “starting to fall” in the U.S. financial system. He pointed to the failure of Silicon Valley Bank, surging inflation and the Federal Reserve’s aggressive rate hikes. Then he warned that “we’re already paying for years of easy money” and that “more seizures and shutdowns” may be coming in the near future.

Now a bank twice the size of Silicon Valley Bank has failed, and a study published by the Social Science Research Network reveals that another 185 banks are at risk of failure if their depositors decide to withdraw funds. The financial turmoil in the U.S. is far from over. Smaller to midsize banks will likely fail, causing the biggest banks to get even bigger and financial power to become even more centralized and controlled by very few elites.

Signature prophecy: Herbert W. Armstrong predicted that a financial crisis in America would likely be the catalyst prompting Europe to unite. Specifically, he warned in 1984 that a banking crisis “could suddenly result in triggering European nations to unite as a new world power larger than either the Soviet Union or the U.S.” (co-worker letter, July 22, 1984). In other words, a banking crisis could destroy the global financial system, scare European nations into surrendering control to a central authority, and create a new world order wherein America is no longer the superpower.

Learn more: Read “How the Global Financial Crisis Will Produce Europe’s 10 Kings.”