Bank stocks tumble after a 'double whammy' of bad news that could spell trouble for the entire industry
US bank stocks tumbled by the most in nearly three years on Thursday as investor sentiment surrounding the sector continues to sour.
The KBW Bank Index sank as much as 7.7%, its biggest one-day drop since June 2020. SVB Financial Group was the gauge’s biggest decliner, sinking a record 60% after the Silicon Valley-based lender took steps to shore up its capital position following losses in its securities portfolio. Other big bank stocks were also lower, with Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. all sliding at least 5%.
“Bank stocks were already trading poorly this week after KeyCorp warned about elevated deposit betas and the selling intensified on Thursday thanks to the double whammy of Silvergate and SVB Financial,” said Vital Knowledge founder Adam Crisafulli.
Thursday’s plunge completely wipes out what had been a strong start to 2023 for bank stocks. The KBW Bank Index was up more than 14% to begin the year, but declines across four of the last five weeks have pushed the benchmark back into the red.
Fortune‘s CFO Daily newsletter is the must-read analysis every finance professional needs to get ahead. Sign up today.
