Finance

Most of the S&P 500 is already in correction territory as benchmark teeters near milestone

Published

3 months ago

March 11, 2025

A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City on March 10, 2025.

Charly Triballeau | Afp | Getty Images

The majority of the stocks in the S&P 500 are already in correction territory as the sell-off on Wall Street continues to drag the benchmark closer to that key threshold.

As of Monday’s close, 366 S&P 500 components or 73% were trading 10% or more below their respective 52-week highs, which means they have already suffered a correction. A total of 203 components closed more than 20% below 52-week highs as of Monday, meaning they are in bear market territory.

The S&P 500 is in the red again Tuesday, sitting about 9% below its 52-week high reached on Feb. 19. The market decline accelerated in the past week as President Donald Trump’s aggressive tariffs stoke fears of slowing economic growth and even a recession.

S&P 500

Five out of 11 S&P 500 sectors are in correction territory – consumer discretionary, tech, communication services, materials and energy.

The biggest laggards in the S&P 500 include drug maker Moderna and the highly volatile artificial intelligence play Super Micro Computer, which have fallen 79% and 69% from their record highs, respectively.

First Solar, Intel, Enphase Energy, Dollar Tree, Estee Lauder and Tesla have all declined at least 50% from their recent peaks.

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Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”