Is This Silicon Valley Bank Collapse Part 2?[Stocks](https://moneymorning.com/category/article/stocks/) # Is This Silicon Valley Bank Collapse Part 2?  by Chris Johnson  October 17, 2025  Share it: ## Is the Regional Banking Meltdown Starting Again? The SPDR S&P Regional Banking ETF ( [KRE](https://moneymorning.com/stocks/kre)) dropped over 6% on Thursday, reigniting fears that a new banking crisis could be forming. The selloff was triggered by a wave of bad loan disclosures from Zions Bancorporation and Western Alliance, two banks that tumbled 13% and 10% respectively after revealing credit losses that reminded investors of the 2023 Silicon Valley Bank collapse. The fallout didn’t stop there. Shares of Jefferies and other regional lenders followed suit, and the contagion spread globally, with European bank stocks sliding nearly 3%. Major U.S. financials weren’t spared either. JP Morgan fell 1.5% pre-market Friday, Citi dropped 1.9%, and Bank of America lost nearly 3%. This renewed scrutiny comes amid lingering concerns over lending standards. Investors are increasingly questioning how so many credit issues are surfacing at once—and whether this reflects deeper problems in the banking sector. JP Morgan CEO Jamie Dimon added fuel to the fire earlier this year when he warned, “when you see one cockroach, there are probably more.” ## Technical Breakdown Signals More Pain Ahead Thursday’s 7% intraday collapse in [KRE](https://moneymorning.com/stocks/kre) was technically significant. The ETF broke below both its 200-day moving average and the round-numbered $60 price level, two key areas of support now turned resistance. It also confirms a breakdown below its 50-day moving average, which is starting to roll over, a classic early warning sign of a downtrend. Even more concerning is that [KRE](https://moneymorning.com/stocks/kre) is now just 3% above its 20-month moving average.  A close below that level would officially push the ETF into a long-term bear market for the first time since the 2023 banking crisis. The technical damage done this week raises the probability that institutional investors will continue dumping regional bank stocks in the sessions ahead. ## Macro Backdrop Turns Bearish for Banks The fundamental setup isn’t any better. While interest rates may eventually move lower, slowing loan growth, weakness in the commercial real estate sector, and rising auto loan defaults all point to shrinking margins and higher risk for regional lenders. Add in a slowing U.S. economy, and the case for holding bank stocks weakens further. ## What’s the Trade? With [KRE](https://moneymorning.com/stocks/kre) breaking support and trending lower, a move toward the $50 level is now in play. Traders may consider bearish setups using put options or hedging via the **ProShares UltraShort Financials ETF (SKF)**, which aims to return 2x the inverse of daily financial sector performance. Until lending risk clears and economic signals stabilize, this is a sector better left on the sidelines. **Beat the market, without relying on brokers or biased institutions.** Email(Required) Company This field is for validation purposes and should be left unchanged. Subscribe By submitting your email address, you will receive a free subscription to _Money Morning!_ and occasional special offers from us and our affiliates. You can unsubscribe at any time and we encourage you to read more about our [Privacy Policy](https://moneymorning.com/privacy/). ## One moment, please: Processing your submission ###### More Trending Stories from Money Morning - [$10,000 Invested in MercadoLibre 5 Years Ago Would Be How Much?!](https://moneymorning.com/2026/02/27/10000-invested-in-mercadolibre-5-years-ago-would-be-how-much/) - [Is a Buyout the Hope PayPal Investors Have Been Waiting For?](https://moneymorning.com/2026/02/27/is-a-buyout-the-hope-paypal-investors-have-been-waiting-for/) - [Here's Why ACM Research Is a Buy Despite Its Earnings Miss](https://moneymorning.com/2026/02/27/heres-why-acm-research-is-a-buy-despite-earnings/) - [Axon Enterprise Stuns the Market With Huge Q4 Earnings Beat](https://moneymorning.com/2026/02/27/axon-enterprise-stuns-the-market-with-huge-q4-earnings-beat/) - [Anthropic Mauls CrowdStrike Again. Here's Why the Cybersecurity Stock Is a Buy](https://moneymorning.com/2026/02/25/anthropic-mauls-crowdstrike-again-heres-why-the-cybersecurity-stock-is-a-buy/) Share it: ### Popular Articles ###### [Here's Why ACM Research Is a Buy Despite Its Earnings Miss](https://moneymorning.com/2026/03/01/why-acm-research-is-a-buy-despite-earnings/) March 1, 2026 ###### [$10,000 Invested in MercadoLibre 5 Years Ago Would Be How Much?!](https://moneymorning.com/2026/02/27/10000-invested-in-mercadolibre-5-years-ago-would-be-how-much/) February 27, 2026 ###### [Here's Why ACM Research Is a Buy Despite Its Earnings Miss](https://moneymorning.com/2026/02/27/heres-why-acm-research-is-a-buy-despite-earnings/) February 27, 2026 ###### [Axon Enterprise Stuns the Market With Huge Q4 Earnings Beat](https://moneymorning.com/2026/02/27/axon-enterprise-stuns-the-market-with-huge-q4-earnings-beat/) February 27, 2026 Notifications reCAPTCHA Recaptcha requires verification. [Privacy](https://www.google.com/intl/en/policies/privacy/) \- [Terms](https://www.google.com/intl/en/policies/terms/) protected by **reCAPTCHA** [Privacy](https://www.google.com/intl/en/policies/privacy/) \- [Terms](https://www.google.com/intl/en/policies/terms/)