Wall Street concerns cause bank stocks to fall; First Republic shares are down 78% and Bank of America is down 3.7%.

The S&P 500 had barely moved in morning trade after falling 1.4% at the opening.

In morning trade, the S&P 500 remained essentially flat, but only after falling 1.4% at the ope After the second- and third-largest bank collapses in U.S. history, Wall Street is concerned about what may be the next to collapse, and markets are swinging wildly Monday as investors hurry to find a secure place to put their money.

After falling 1.4% at the opening, the S&P 500 remained mostly flat in morning trade. Once more, banks were the source of the biggest decreases. Investors are concerned that the financial system may be breaking due to the continual rise in interest rates that are being used to contain inflation.

When Silicon Valley Bank and Signature Bank went under on Friday, the U.S. government unveiled a proposal late Sunday to support the banking sector.

The regional banks that are a few sizes smaller than the enormous, “too-big-to-fail” banks that contributed to the collapse of the economy in 2007 and 2008 are under the most pressure. Even after the bank announced on Sunday that it had bolstered its finances with money from the Federal Reserve and JPMorgan Chase, shares of First Republic fell 78%.

Large banks, which have undergone several stress tests since the 2008 financial crisis, didn’t suffer as much. Bank of America declined 3.7%, while JPMorgan Chase dropped 0.7%.

“Thus far, it appears that the possible issue institutions are limited, and significantly, they do not include so-called systemically important banks,” ING analysts added.

The broader market was also holding up better as anticipation grew that all the turmoil would push the Fed to ease back on its economy-rattling interest rate rises. Such a shift would provide greater breathing room for the economy and banking system, but it would also provide more oxygen to inflation.

As of 10:34 a.m. Eastern time, the Dow Jones Industrial Average was up 30 points, or 0.1%, at 31,939, while the Nasdaq composite was up 0.4%.

Stock markets in Asia were divided after the United States revealed a plan to safeguard bank depositors, but losses worsened as trade moved westward through Europe. Germany’s DAX fell 3% as bank equities throughout Europe fell. Fear among stock investors reached its greatest level since October on Wall Street.

“Restoring liquidity in the banking system is simpler than rebuilding trust, and today it is obviously about the latter,” said Quincy Krosby, LPL Financial’s senior global strategist.

All of the panic caused the price of gold to rise as investors sought for safe havens. It increased by 2.3% to $1,909.50 per ounce.

Treasury prices rose as well, reflecting both demand for safety and expectations for a looser Fed. As a result, their yields fell, and the 10-year Treasury yield fell to 3.49% from 3.70% late Friday. There is a significant change in the bond market.

The two-year yield, which is more sensitive to Fed predictions, fell even more. It dropped to 4.09% from 4.59% on Friday.

Some investors are urging the Fed to issue emergency interest rate reduction quickly in order to stop the bleeding. The general consensus is that the Fed will likely delay or postpone further rate hikes.

Even that would be a considerable change from expectations earlier this week, when many traders expected the Fed to raise its main overnight interest rate by 0.50 percentage point at its meeting later this month. Only last month, the Fed reduced its raise to 0.25 points from 0.50 and 0.75 points previously.

The danger was that persistently rising inflation would drive the Fed to get more harder, and investors expected the Fed to hike at least a couple more times after that.

“At this point in time, depending on financial market reactions and the overall impact on the economy, we wouldn’t rule out that the hiking cycle is ended and that the next move by Fed policymakers may be lower rather than higher,” said Kevin Cummins, NatWest’s senior U.S. economist.

Higher interest rates can reduce inflation by slowing the economy, but they also increase the chance of a future recession. They also impacted stock and bond prices that were already in investors’ portfolios.

This latter impact is one of the causes of Silicon Valley Bank’s difficulties. The Fed began raising interest rates almost precisely a year ago, and its most rapid rate hike in decades has pushed its main overnight rate to a range of 4.50% to 4.75%. This is an increase from almost nothing.

This has harmed bank investment portfolios, which frequently store their funds in Treasury bills since they are among the safest assets on the planet.

The failure of Silicon Valley Bank sent shockwaves throughout the world.

The government agreed for the sale of Silicon Valley Bank UK Ltd., the California bank’s British affiliate, for one British pound, or around $1.20.

BaFin, Germany’s financial regulator, restricted asset disposals and payments by Silicon Valley Bank’s German office on Monday and placed a suspension, effectively shutting it down for customer transactions.

The U.S. Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. announced efforts to safeguard Silicon Valley Bank’s clients and stop more bank runs on Sunday, before trading started in Asia. They also guaranteed that all clients would have access to their cash and be protected.

After the fall of Washington Mutual in 2008, regulators shut down Silicon Valley Bank on Friday after investors withdrew billions of dollars from the institution in a couple of hours. The third-largest bank failure in American history, New York-based Signature Bank was also confirmed to be being seized on Sunday.