US bank stocks hit by Fed's dovishness
Their 6.7% fall this year is preventing S&P 500 from erasing year-to-date decline
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New York
BEFORE this year, bank stocks were the second biggest driver of the rally that added US$14 trillion to American share prices since 2009. They are rapidly becoming the biggest drag, pummelled every time the Federal Reserve signals dovishness.
That is a problem for equity bulls who over seven years grew accustomed to harmonised advances in the Standard & Poor's 500 Index whenever the market got a whiff of stimulus. Cracks are forming in the monolith: financial companies were one of only two industries to fall on Wednesday after Fed officials scaled back forecasts for hikes.
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