On the eve of earnings announcements, U.S. bank stocks face their worst quarterly performance since the 2023 crisis
U.S. bank stocks have experienced their worst quarterly performance since the crisis in 2023, with the KBW Bank Index down 5.1% since the beginning of the year. The market is concerned that Trump's trade policies may trigger inflation, slow down economic growth, and lead analysts to lower earnings expectations for financial companies. Jefferies' poor earnings have raised market caution, and JPMorgan Chase, Wells Fargo, and Morgan Stanley will release their financial reports on April 11
According to Zhitong Finance APP, U.S. bank stocks are expected to experience the most severe quarterly decline since the crisis concerns triggered by the regional bank failures two years ago, due to broader economic worries stemming from Trump's trade war. The KBW Bank Index has fallen 5.1% since the beginning of the year, marking the worst three-month performance since March 2023. At the start of trading on Monday, all six major U.S. bank stocks were down, with futures indicating another round of massive sell-offs in the stock market before Trump introduces tariffs on April 2.
The market has been concerned that Trump's shift in trade policy could reignite inflation and slow down U.S. economic growth, with surveys showing increasing worries among American consumers. Ahead of the next round of earnings reports, analysts have downgraded stock ratings and lowered earnings expectations for financial companies.
Last week, Jefferies (JEF.US) reported disappointing earnings due to a decline in its investment banking and capital markets revenue, leading to a sharp drop in its stock price. This serves as a potential warning signal for other banks, as the market is focused on rising economic uncertainty, and the anticipated wave of mergers and acquisitions and initial public offerings (IPOs) has yet to materialize. JPMorgan Chase (JPM.US), Wells Fargo (WFC.US), and Morgan Stanley (MS.US) will kick off the earnings season on April 11