US futures and European stocks pared broader declines earlier sparked by a rush to havens amid concerns about the health of the US banking system following the collapse of Silvergate and the rout that has crushed Silicon Valley Bank, sending it shares down 40% premarket after plunging 60% on Thursday amid a spreading liquidity crisis. The collapse of the lender was sufficiently traumatic to push today's payrolls report - until yesterday the highlight of the week - off the front page.
S&P 500 futures fell slightly, erasing a bigger drop that pushed eminis briefly below 3,900 setting up the underlying index to extend a rout fueled by liquidity concerns in the banking sector and as investors prepare for the monthly payrolls report. The benchmark dropped the most in over two weeks on Thursday, with banks slumping as SVB Financial Group took steps to shore up its capital position following losses in its securities portfolio. Nasdaq 100 futures were little changed.
Europe’s Stoxx 600 equity gauge dropped more than 1%, with an index of bank stocks sliding the most since June. Bond markets were also roiled by the SIVB news, sending yields plunging and reversing sharp gains earlier this week following Powell's hawkish speech. Treasuries extended gains for a second day, driving 10-year yields down by as much as 11 basis points to a three-week low, while German 10-year government borrowing costs were at one point poised for their biggest slump since early February.