New York, January 23, 2026, 13:12 EST — Regular session
Shares of Bank of America Corp dropped roughly 1.8% to $51.49 in early Friday afternoon trading, dragged down amid a broad sell-off in U.S. bank stocks. The Invesco KBW Bank ETF lost around 2.5%, while JPMorgan Chase, Citigroup, and Wells Fargo each dipped close to 2%.
Traders are selling as they focus on the rate outlook ahead of the Federal Reserve’s January 27-28 meeting. Economists surveyed by Reuters predict the Fed will keep the funds rate steady at 3.50%-3.75%. Jeremy Schwartz, senior U.S. economist at Nomura, told Reuters, “The economic outlook on the surface suggests the Fed should remain on hold.” (Reuters)
Policy risk is starting to show up in the bank sector. Reuters reported Thursday that Bank of America is exploring new credit cards with a 10% interest rate to align with President Donald Trump’s push for a national rate cap. Citigroup is reportedly considering similar products. Following the news, BofA shares rose about 1.1% in afternoon trading. (Reuters)
At Davos, Bank of America CEO Brian Moynihan took a measured approach. “So we’re all trying to noodle on that,” he told an Axios Live session, referring to how to offer a lower-rate product without changing rates on current accounts, Axios reported. JPMorgan’s Jamie Dimon slammed a 10% cap as an “economic disaster,” Axios added. (Axios)
Credit cards qualify as unsecured loans, with the annual percentage rate, or APR, serving as a critical profit driver since it dictates what borrowers pay on revolving balances. Imposing a hard cap might lead to stricter underwriting, reduced rewards, and a narrower pool of customers eligible for new offers.
Banks are facing a familiar challenge: how margins will hold up if rate cuts come later this year. Net interest income—the difference between what lenders earn on loans and what they pay depositors—usually shrinks when rates drop faster than banks can adjust deposit rates.
Bank of America is one of four Wall Street banks SpaceX is weighing for senior positions in a possible IPO, according to a source who spoke to Reuters on Thursday. While the mandate promises to be lucrative, the specific roles and timing remain fluid as pre-IPO talks evolve. (Reuters)
The downside for bank stocks is pretty clear. Should the credit-card cap talk turn into actual legislation with serious enforcement, card issuers might tighten credit. That would slow loan growth and squeeze fee-heavy products just as consumer delinquencies begin to climb.
Friday’s decline unfolded amid a wary Wall Street mood, as Intel plunged following a grim forecast. Investors held tight to mega-cap tech stocks ahead of next week’s earnings, Reuters reported. (Reuters)
Bank of America is now focused on the Fed’s January 28 decision and potential Congressional action on credit-card pricing rules — two key factors that could drive the next move for rate-sensitive bank stocks.
