Bank stocks tumbled on Monday amid a wider market sell-off as investors were concerned that inflation could lead to higher borrowing costs for companies.
The KBW Nasdaq Bank Index fell 4.91% on Monday. Its components include the largest U.S. banks and regionals such as People’s United Financial and Zions Bancorp.
Wells Fargo shares dropped almost 10% to $57.70. The Federal Reserve slapped the San Francisco bank with an enforcement action last week that bars the company from growing larger; four Wells directors will also be replaced. The sanctions were punishment for Wells Fargo’s fake-accounts scandal and other problems.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, May 27, 2016. U.S. stocks edged higher, with the S&P 500 on course for its biggest weekly advance since March, while investors awaited remarks from Federal Reserve Chair Janet Yellen for hints on the timing of the next interest-rate increase. Photographer: Michael Nagle/Bloomberg
Michael Nagle/Bloomberg
In other notable bank stocks, Bank of America fell 5.5% to $30.21; PNC Financial Services Group dropped 4.9% to $150.21; and Capital One Financial fell 4.5% to $96.99.
More than $1 trillion of market capitalization across all sectors was erased on Monday as many investors worried that the market had become overvalued.
“I think sentiment was a little too optimistic," Brad McMillan, chief investment officer for Commonwealth Financial Network, told Bloomberg.
Stocks' performance last week was the worst for markets since 2016, according to Yahoo Finance. The trend continued apace on Monday on extremely high trading volume.
The Dow average fell 1,175 points on Monday, the largest single-day point decline in history, the Wall Street Journal reported. The Dow’s 4.6% slide was its biggest drop since 2011, according to Bloomberg. Earlier in the trading day on Monday, the Dow had dropped as much as 1,500 points. The Dow closed at 24,345.
The S&P 500 Index declined 4.1% in its steepest drop since August 2011. Bitcoin fell more than 20%, sliding below $7,000.
Neel Kashkari, president of the Minneapolis Fed, said in a Monday interview that wage growth has not accelerated enough to support faster rate hikes this year.
The fund is designed to generate a financial return, as well as Community Reinvestment Act credit, for TD. Its inaugural investment is in a mixed-use project that will include 49 affordable housing units.
A government shutdown and a single senator's hold prevented the renewal this week of a bipartisan law that helped banks and other firms defend against hackers.
Federal Reserve Vice Chair Philip Jefferson said Friday that the economic outlook is uncertain and that he was adopting a cautious approach to gauging whether slowing growth and a softening labor market outweigh inflation pressures from tariffs.
The CardWorks subsidiary has officially taken over Ally Financial's Ollo credit card portfolio, ending a five-year dance between the two companies that first had Ally buying CardWorks for $2.7 billion.
The Consumer Bankers Association elected Atlantic Union Bank's Maria Tedesco as its 2025 board chair; Banco Santander's Steffen Doyle is leaving the firm; Commerzbank's lawyers allege an ex-analyst made up sexual harassment claims against a colleague after he lost his job; and more in this week's banking news roundup.
The ongoing government shutdown prevented the Bureau of Labor Statistics from releasing its September jobs report Friday, but job growth appears to be softening. The lack of reliable government data comes as the Federal Reserve mulls further interest rate cuts.
