U.S. Bank Stock Index Poised to Set All-Time Closing Record
According to Jinse Finance, as investors speculate that the Federal Reserve may cut interest rates next month, the U.S. bank stock index could see its first record close since January 2022. The KBW Bank Index, which tracks 24 of the largest U.S. banks, rose as much as 3%, putting it on track to set a historic closing high. This would end a slump of more than 900 trading days, the longest since the financial crisis, when the index went over 3,500 sessions without reaching a new peak. As Powell cautiously opened the door to a rate cut in September, bank stocks joined Friday’s broader market rally. Overall, Wall Street’s major banks posted solid second-quarter results, buoyed by volatility in the stock, bond, and foreign exchange markets. Previously, all banks that underwent the Federal Reserve’s annual stress test passed with ease, allowing them to raise dividends to levels exceeding market expectations. This year’s rally in bank stocks has also been driven by market expectations that a more lenient regulatory environment under a Trump administration would spur corporate M&A activity, thereby boosting investment banking revenues.
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The Federal Reserve is expected to begin cutting interest rates in September, earlier than the December forecast
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