Credit crunch and recession fears rise for investors and consumers.

Investors are worried about a potential credit crunch hitting the US economy, which could trigger a recession. The recent collapse of Silicon Valley Bank and Signature Bank due to a tidal wave of withdrawals has sparked fears that regional US banks could also run into trouble. Elevated interest rates, which have played a part in SVB's demise by slashing the value of its bond portfolio, have fanned fears that other mid-sized and smaller lenders face similar risks, causing a flight of deposits. If lending dries up, that could weigh on the value of stocks, real estate, and other assets, and crimp overall demand — a recipe for a painful recession.