In this video: The Technical Cliff: Banks Sell Off, Tariff Decision Loom, and Silver Hits $92. Video by Gareth Soloway.
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Bank stocks are currently experiencing a sell-off driven primarily by concerns over a potential 10% cap on credit card interest rates proposed by the U.S. President, along with mixed fourth-quarter 2025 earnings reports from major lenders. These factors outweigh the generally strong underlying financial health of the banks.
Key Insights
-Regulatory Concerns: President Trump's proposed cap on credit card interest rates is a major concern for investors, who fear it would render large parts of the credit card business unprofitable and force banks to slash credit lines and reward programs.
-Mixed Earnings: While major banks like Bank of America and Citigroup reported strong profits, other metrics were mixed. Wells Fargo missed revenue expectations, causing its stock to slide, while -JPMorgan Chase also saw a decline after executives warned about the impact of the potential rate cap.
-Fundamentally Sound: Despite the recent stock declines, many bank executives and analysts maintain a bullish outlook on the U.S. economy for 2026, citing resilient consumers and strong capital positions.
-Prior Sell-offs: The sector also experienced a sell-off in late 2025 due to concerns over exposure to bad loans and announcements about writing off loans linked to fraudulent activities.
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