Global markets skidded as signs of credit stress at U.S. regional banks unnerved investors and had markets calling for more Federal Reserve policy easing.

Wall Street futures were in negative territory ahead of more earnings from regional banks later in the day.

Dow futures were down 0.82 per cent, S&P 500 futures dropped 1.09 per cent and Nasdaq futures were 1.27 per cent lower as of 6 a.m. ET.

TSX futures followed sentiment lower after Canada’s main stock market ended down yesterday.

On Wall Street, markets are watching earnings from American Express Co.

“While the recent issues of the two lenders seems well contained, where there is smoke there is often fire and the remedy of the 2023 crisis has created a tinderbox for another banking flare-up,” said Tony Sycamore, analyst at IG, referring to a series of bank failures that year which prompted the Fed to take extraordinary steps to stabilize the financial system.

Overseas, the pan-European STOXX 600 was down 1.51 per cent in morning trading. Britain’s FTSE 100 fell 1.28 per cent, Germany’s DAX declined 2.01 per cent and France’s CAC 40 gave back 0.61 per cent.

In Asia, Japan’s Nikkei closed 1.44 per cent lower, while Hong Kong’s Hang Seng dropped 2.48 per cent.

Oil prices edged lower, heading for a weekly loss of about 3 per cent, with uncertainty over global energy supplies after U.S. President Donald Trump and Russian President Vladimir Putin agreed to meet in Hungary to discuss ending the war in Ukraine.

Brent crude futures were down 0.7 per cent at US$60.62. West Texas Intermediate (WTI) futures slid 0.8 per cent to US$57.02.

“Concerns of tighter supplies were eased after it was announced that Trump would be meeting with Putin to discuss ending the war in Ukraine,” Daniel Hynes, an analyst at ANZ, said in a note.

In other commodities, spot gold rose 0.2 per cent to US$4,335.87 per ounce after scaling another record high of US$4,378.69 earlier in the session. U.S. gold futures for December delivery climbed 1 per cent to US$4,348.90.

The Canadian dollar strengthened against its U.S. counterpart.

The day range on the loonie was 71.08 US cents to 71.25 US cents in early trading. The Canadian dollar was down about 1.84 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.12 per cent to 98.22.

The euro gained 0.06 per cent to US$1.1696. The British pound was little changed at US$1.3432.

In bonds, the yield on the U.S. 10-year note was last down at 3.964 per cent.

*Note: Scheduled U.S. data reports may not be released if the government shutdown isn’t resolved.

Euro area inflation data for September

8:30 am ET: Canada international securities inflows and outflows for August

8:30 am ET: U.S. housing starts, building permits, and import prices (tentative)

9:15 am ET: U.S. industrial production for September (tentative)

With Reuters and The Canadian Press