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Dow falls 500 points as banking fears spread

(CNN) -- The Dow opened the day with a decline of more than 500 points Wednesday as banking fears spread across global markets, though the index pared losses to close the day down about 281 points, or 0.9%.

The S&P and Nasdaq slipped roughly 2% and 1.5%, respectively, earlier in the session. The S&P closed down about 0.7%, while the Nasdaq eked out a slight gain for the day.

The New York-listed shares of embattled Swiss lender Credit Suisse had fallen as much as 30% earlier in the day after its biggest shareholder chose not to increase its funding, after the bank cited "material weakness" in its financial reporting Tuesday and got rid of executive bonuses.

Credit Suisse stock ultimately closed about 24% lower. Switzerland's central bank said late Wednesday it was ready to provide financial support to Credit Suisse if necessary.

Shares of US-based banks also fell: Wells Fargo closed down about 3.3% and JPMorgan Chase stock dropped 4.7%.

Wall Street also continues to grapple with banking tumult domestically, after the collapse of Silicon Valley Bank and Signature Bank rocked markets last week and early this week. While stocks recouped some of their losses on Tuesday, investors remain wary of the banking fallout and what it means for the Federal Reserve's interest rate-hiking campaign going forward and the overall stability of the financial sector.

CNN's Fear & Greed Index was at 22 Wednesday morning before dropping to about 20 in the late afternoon, indicating extreme fear in the market.

Markets also digested the latest economic data giving insight into the state of inflation. The Producer Price Index, a metric measuring prices paid for goods and services by businesses before they're sold to customers, fell to 4.6% for the 12 months ended in February.

At the same time, US retail sales fell 0.4% last month, showing that Americans cut back on spending in February after splurging the month before.

Both data points suggest that the Fed is making headway in its fight against inflation. The CME FedWatch Tool showed that traders see a 58.3% probability of a quarter-point rate hike at the central bank's meeting next week.

On the heels of the Silicon Valley Bank collapse, the largest failure of a US bank since 2008, CNN is hosting a special on the crisis addressing what this means for banks and their customers everywhere. Watch "Bank Bust: What's Next for America's Money" tonight, March 15, at 9 pm ET.

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