Bank stocks fell early today but closed near the high of the day after the Federal Reserve raised interest rates by a quarter point.
Banks battled back from big losses this morning to finish near their highs of the day after the Federal Reserve raised interest rates today.
The financial stocks in the S&P 500 were under water by more than 1% this morning, but rallied modestly after word came that the Fed would increase short-term rates to finish the day up 0.2%.
Three banks that Barron’s argued would benefit from another Fed rate hike also sold off earlier Wednesday, but then moved up after the announcement. Shares of Comerica (CMA), Zions Bancorporation (ZION), and SVB Financial Group (SIVB) were all down by at least a percentage point but finished the day well off their lows. Comerica gained 0.5% to $74.26, Zions Bancorp advanced 0.2% to $43.23, and SVB Financial fell 0.4% to $182.56.
These stocks have faced some headwinds, one being a flattening yield curve that can signal a slowing economy or worse. Still, they “have been collecting higher fees on variable-rate loans to commercial borrowers” but “have not begun paying higher rates to depositors.”