Shares of banks and other financial institutions fell as volatility washed through global markets amid fears about a shift in Federal Reserve policy.
Federal Reserve Bank of St. Louis President James Bullard warned that the central bank is preparing for interest-rate hikes as soon as late 2022, and suggested he would push for imminent changes in the Fed's bond-buying programs.
"I'm leaning a little bit toward the idea that maybe we don't need to be in mortgage-backed securities with a booming housing market and even a threatening housing bubble here, according to some people," said Mr. Bullard.
The Dow Jones Industrial Average incurred its biggest weekly loss since January, while the small-cap Russell 200 index closed more than 5% below recent highs. Stock-market volatility may have been exacerbated by options expiration.
The stock-market volatility coincided with a rush of options activity, with more than 116 million options contracts set to expire on Friday, according to Cboe Global Markets data, the second-highest level ever.
British bank HSBC Holdings expects to take $3 billion in losses as part of an agreement to sell its unprofitable French retail bank, as European banks continue to struggle.
Masayoshi Son, the Japanese billionaire who controls tech conglomerate Softbank, has had disagreements with Credit Suisse over a stock-borrowing account and has reduced his dealings with the Swiss bank, The Wall Street Journal reported. Credit Suisse's issues with Mr. Son follow major losses for the Swiss bank from its exposure to British financial startup Greensill Capital and Archegos Capital.
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(END) Dow Jones Newswires