Market Extra: Bank stocks surge after inflation report, regional banking ETF logs biggest gain since May

by | Nov 14, 2023 | Stock Market

Exchange-traded funds that buy bank stocks surged Tuesday after a reading on inflation was softer than Wall Street analysts expected. Shares of the SPDR S&P Regional Banking ETF
closed 7.4 % higher, booking their largest percentage increase since May, according to Dow Jones Market Data. The Invesco KBW Bank ETF
which holds major Wall Street banks, finished Tuesday upĀ 4.7% to also notch its biggest daily percentage jump since May.

U.S. bank stocks jumped as U.S. Treasury yields tumbled after fresh data Tuesday from the consumer-price-index showed headline inflation was flat in October. Regional banks had been hammered earlier this year on investor worries that elevated Treasury yields were pressuring their balance sheets, after Silicon Valley Bank collapsed in March. While Treasury yields fell Tuesday, they remain up so far this year in the wake of the Federal Reserve aggressively raising its benchmark interest rate to tame the hottest inflation in decades. The annual pace of inflation ran as hot as 9.1% in June 2022, as measured by the consumer-price index. Inflation has fallen from its 2022 peak, with the consumer-price index showing further signs of easing in October. The rate of headline CPI data slowed year over year to 3.2%, from 3.7% in the 12 months through September, according to a report Tuesday from the Bureau of Labor Statistics. The Fed has been aiming to bring inflation down to its 2% target. Meanwhile, the yield on the 10-year Treasury note
fell 19.1 basis points on Tuesday to 4.440%, its biggest daily dro …

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