Bank stocks fell on Tuesday in the wake of the Federal Reserve's emergency rate cut, with Bank of America (BAC) - Get Report, Wells Fargo (WFC) - Get Report and PNC Financial (PNC) - Get Report leading the way down.
At last check shares of PNC dropped 5% to $126.02, Bank of America fell 4.9% to $27.92, and Wells Fargo declined 4.2% to $40.49.
The Fed's decision to slash interest rates by half a percentage point was designed to offset the growing economic disruption caused by the coronavirus.
Also taking some hits were Morgan Stanley (MS) - Get Report, down 3.1% to $45.02 a share, JPMorgan (JPM) - Get Report, off 3% to $117.88, and Citigroup, (C) - Get Report, which dropped 2.2% to $66.13 a share.
Goldman Sachs (GS) - Get Report and Toronto-based TD Bank (TD) - Get Report fared a bit better. Goldman, which is making a big push into digital consumer banking, edged down 1.7% to $205.90, while TD Bank's stock fell 1.6% to $51.38 a share.
The Fed's rate cuts are expected to squeeze the bottom lines at banks. The drop in rates is expected to compress the spread between short-term and long-term lending rates, while also positioning banks to shell out more for deposits than the market rate.
The Fed Tuesday morning cut interest rates to 1.25%, down from 1.75%, in the first emergency cut since late 2008 during the financial crisis.
JPMorgan had gotten a boost on Monday when Piper Sandler analyst Jeffery Harte hiked his rating on the megabank's stock to overweight.