Why Shares of Wells Fargo Are Up Today

Shares of Wells Fargo (NYSE: WFC) were trading nearly 4% higher as of 10:45 a.m. ET today for no obvious reason, although I suspect it is likely because of President Joe Biden's decision to reappoint Jerome Powell as the chairman of the Federal Reserve.

Holders of bank stocks in general appear to be pleased with the Powell news, as the KBW Nasdaq Bank Index, which tracks the largest bank stocks in the country, traded more than 2% higher this morning as well.

Wells Fargo is likely trading higher than the group as a whole because the bank is more captive to the Federal Reserve right now. It remains under a Federal Reserve-imposed asset cap limiting the bank from growing its balance sheet. The asset cap is a result of the bank's infamous phony-accounts scandal and has caused the loss of billions of dollars in profits.

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Source Fool.com