Why Bank Stocks Got Rocked Today
Shares of banks and fintechs were broadly getting pummeled on Thursday. Large-cap money center bank Bank of America (NYSE: BAC) was down a whopping 6.2%, up-and-coming digital bank SoFi Technologies (NASDAQ: SOFI) was down 5.9%, and fintech loan platform Upstart Holdings (NASDAQ: UPST) was down 8%, respectively.
It is strange to see such a broad cross section of the financial world down so much, which is unsettling. There may be two factors at play here, each resulting in the same risk to banks or bank-adjacent companies. First, SVB Financial Group (NASDAQ: SIVB) plunged 60%, after it announced it was raising new capital amid deposit outflows. Second, investors may be nervous about tomorrow's jobs report and next week's inflation data, which could spur the Fed to raise short-term interest rates even higher.
Both would have compounding bad effects on banks more broadly.
Source Fool.com
