With the S&P 500 depreciating around 1.2%, major banks, including JPMorgan JPM, Bank of America BAC, Morgan Stanley MS, Citigroup C, Wells Fargo WFCand Goldman Sachs GS, witnessed significant declines in prices on Tuesday. This resulted from the heightening political drama in Italy and Spain, which has spooked investors, creating uproar in global markets.
Moreover, the Financial Select Sector SPDR fund XLF— a top bank ETF — declined 3.34%.Particularly, shares of JPMorgan, BofA, Morgan Stanley, Citigroup, Wells Fargo and Goldman have declined 4.27%, 3.98%, 5.75%, 3.99%, 3.55% and 3.4%, respectively.
Worries surrounding Italy’s rising debt yields raised concerns over the stability of Eurozone, dealing a blow to U.S. bank stocks. The rising political uncertainty has put pressure on the European markets and cast a pall over the Euro projects. Therefore, increasing demand for traditional safe assets, like the U.S. debt, has brought down the U.S. 10-year Treasury yields, triggering losses for banks in the nation.
Further, subdued guidance from some of the Wall Street biggies has also raised investors’ concerns, dragging down banking stocks.