US bank stocks plummeted following a tariff announcement that President Trump cleans up on Thursday as concerns have been raised about how the biggest names in finance will be affected by the growing likelihood of a US recession.
The index tracking the US banking industry (^BKX) fell by about 10% on Thursday. This is the worst day since the regional banking crisis struck the industry in March 2023.
Individual stocks in the country’s largest banks also fell. JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS), and Bank of America (BAC) fell between 7% and 12%.
Banks were far from the only part of the financial sector that hit Thursday. Stocks in leading private equity companies Apollo Global Management (APO), ARES Management (ARES), Carlyle Group (CG), and KKR (KKR) all fell between 12% and 16%. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
11:32:14 AM EDT. Market open.
^bkx JPM c
The industry-wide pullback is the latest example of how Trump’s second season hasn’t started as expected for many Wall Street.
Hope for an IPO Bonanza and a deal-making boom is being tested due to the uncertainty surrounding the Trump administration’s trade policy.
Read more: What Trump’s tariffs mean for the economy and your wallet
And now market watchers are increasing the likelihood of US recession and rising inflation.
Even before Trump announced this week, Wells Fargo bank analyst Mike Mayo reduced the median estimates for major banks in the first quarter by 4% and 2% over the next two years.
According to Mayo, the main reason is “paralysis from policy uncertainty.”
“The concern is paralysis as long as policies that can cause paralysis due to expansion, plants and equipment change rapidly.
These biggest US banks will have the opportunity to update investors on how tariffs will impact their businesses next Friday as JPMorgan, Wells Fargo and Morgan Stanley release their first quarter results.
Goldman Sachs, Bank of America and Citigroup will share the results the following week.
Some bank analysts said the biggest lenders could survive the current chaos and could benefit from Trump-era policies.
“I think Banks will certainly get through this well,” Piper Sandler analyst Scott Sheiffers told Yahoo Finance.
The story continues
