Big US bank shares are on track for their worst weekly losing streak since the 2008 Global Financial Crisis, after quarterly earnings failed to lift sentiment for the ailing sector. The 24-member KBW Bank Index is down about 1.1% this week and sits well into correction territory, losing about 13% since its last record in August.
While the group has suffered bigger selloffs over the years, including an almost 17% drawdown earlier this year, it is on pace for a sixth consecutive week of declines. That would be the longest such losing streak since 2008. Citigroup Inc., State Street Corp., Bank of America Corp. and Morgan Stanley are among the worst performers on the gauge, while JPMorgan Chase & Co. is up about 1.7% for the week.
The sector has been battered by worries about how artificial intelligence will disrupt financial services. A hot inflation print this week also raised concerns about how aggressive the Federal Reserve will be in its campaign to rein in persistent inflation. Bloomberg Intelligence analyst Herman Chan said big-bank stocks face a confluence of concerns, with a higher-for-longer rate backdrop raising the risk of slower economic growth and higher loan losses. He noted that third-quarter results did little to reverse the weakness, as fixed-income results disappointed despite strength in equities.
Sustained weakness in bank stocks can be a troubling sign for the economy, given lenders' role in fueling growth through credit. Chan said rising funding costs for AI companies raise questions about the durability of capital-markets revenue tied to the infrastructure buildout, and that agentic AI is emerging as a potential longer-term threat to the stable, low-cost deposits that drive bank profitability. Barclays analyst Jason Goldberg noted the gauge has underperformed the S&P 500 in 18 of 21 trading days since the Fed raised rates on Sept. 16, an unprecedented result across rolling 21-session periods since the index's May 1992 inception.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing