WFC - Why Bank Stocks Plunged Today
A surprise rate cut by the Federal Reserve sent banks stocks sharply lower on Monday.
Banks of all sizes -- including titans JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC), and Citigroup (NYSE: C), as well as smaller banks such as Fifth Third Bancorp (NASDAQ: FITB), SVB Financial (NASDAQ: SIVB), Western Alliance Bancorporation (NYSE: WAL), and Axos Financial (NYSE: AX) -- fell as much as 22%.
COVID-19 -- the disease caused by the novel coronavirus -- threatens to drive the U.S. economy into a recession. The Federal Reserve, in a desperate attempt to mitigate the damage, slashed its benchmark federal funds rate by 100 basis points, to a target range of 0% to 0.25% on Sunday. Interest rates plunged in response.