NEW YORK, January 3, 2026, 13:17 ET — Market closed
- U.S. financial services stocks finished Friday higher overall, with big banks outperforming payment networks.
- Treasury yields ended the week higher as investors looked ahead to next week’s U.S. labor-market data.
- Traders are positioning for a busy January that includes the December jobs report and the start of major bank earnings.
U.S. financial services stocks closed firmer on Friday, with banks leading as Treasury yields climbed and investors leaned into rate-sensitive names. The Financial Select Sector SPDR Fund (XLF) rose 0.3%, while Goldman Sachs gained 4.0%, Wells Fargo added 2.1%, JPMorgan Chase rose 1.0% and Bank of America gained 1.7%; Visa fell 1.2% and Mastercard slid 1.4%.
The sector’s split matters right now because banks’ earnings tend to move with interest-rate expectations, while card networks often trade more like growth stocks. With the market turning the calendar, investors are re-pricing the path of Federal Reserve policy and what it means for profits across lending, trading and consumer spending.
Treasury yields moved higher into the close, with the benchmark 10-year note yield ending at 4.191% after rising 3.8 basis points — a basis point is one-hundredth of a percentage point. U.S. stocks finished mixed but steadier, with the Dow and S&P 500 ending higher. Reuters
For banks, the direction of yields matters because it feeds into net interest margin — the gap between what a lender earns on loans and securities and what it pays out on deposits. Rising long-term yields can help that spread, but only if funding costs don’t rise as quickly.
Investors are also watching whether the next leg in rates is up or down as the economic picture comes into focus. “The fact that there has been softening in the labor market has really given the Fed good cover to change their outlook about reducing rates,” Eric Kuby, chief investment officer at North Star Investment Management, said in a Reuters interview. Reuters
Rate-cut expectations sit at the center of that debate. With the Fed’s benchmark rate at 3.5%-3.75%, fed funds futures imply little chance of a cut at the next policy meeting in late January, while pricing points to roughly even odds of a quarter-point reduction in March. Reuters
Payment networks, by contrast, can react differently to shifts in yields because their valuations often hinge on how investors discount future growth and on the strength of consumer spending. The late-week dip in Visa and Mastercard left them trailing the broader bank rally.
Goldman’s jump highlighted the market’s renewed appetite for investment banks and brokers when risk sentiment improves. Those shares can respond quickly to shifts in expectations for trading activity and dealmaking pipelines.
With earnings season approaching, traders will be looking for updates on loan demand, credit trends and expense discipline. For large lenders, the tone on deposit competition and consumer credit will be as important as headline profit.
In the week ahead, investors will get a run of macro reports that can swing rate expectations, starting with the Job Openings and Labor Turnover Survey on January 7 and the December employment report on January 9. The consumer price index follows on January 13, according to the Labor Department’s release calendar. Bureau of Labor Statistics
Bank earnings land in the same window. JPMorgan said it plans to release fourth-quarter results at about 7:00 a.m. ET on January 13, ahead of an 8:30 a.m. ET conference call, a schedule that often sets the tone for the sector early in reporting season. JPMorgan Chase
On the chart, XLF ended just under $55, a level some short-term traders watch as a near-term ceiling after Friday’s range topped out around that mark. A break above it would put the focus on whether banks can extend their early-January momentum as rates and economic data drive the next trade.
