New York, Jan 23, 2026, 19:56 (ET) — Trading after hours.
- Bank of America shares slipped roughly 1.4% on Friday, while the bank-focused ETF KBE tumbled more than 3%
- First Citizens’ gloomy forecast on interest income weighed on the whole banking sector
- Traders focus on next week’s Fed decision and await updates on the proposed 10% cap on credit-card rates
Bank of America shares dropped 1.4% to $51.72 on Friday, sliding alongside a broad selloff in U.S. bank stocks that outpaced the overall market. JPMorgan Chase slid close to 2%, with Wells Fargo and Citigroup each down over 1%, as bank ETFs absorbed much of the pressure.
The timing is crucial. Banks’ fortunes hinge on rate expectations, since borrowing costs influence both loan pricing and the interest paid on deposits.
Investors have zeroed in on net interest income, or NII — the difference between what banks make on loans versus what they pay on deposits — as they scramble to gauge how many Fed cuts might still be coming.
Wall Street’s key indexes struggled for direction on Friday. The Dow slid 0.58%, the S&P 500 barely moved, and the Nasdaq nudged up 0.28%. It capped a volatile week that saw all three close lower. (Reuters)
Financials took a hit late in the session after regional lender First Citizens BancShares issued a cautionary outlook. The bank forecasted its 2026 net interest income would fall short of Wall Street estimates. CFO Craig Nix told analysts, “Given continued rate cuts, we expect loan interest income to decline.” Truist’s Brian Foran described it as “a difficult adjustment to lower rates,” while Gabelli Funds’ Macrae Sykes remarked there was “little good news from the financials today.” (Reuters)
Bank of America faces fresh pressure on consumer lending amid talks of a temporary 10% ceiling on credit-card interest rates. Reuters has reported the bank is exploring options to roll out new cards capped at 10%, with Citigroup mulling a similar move. This comes after President Donald Trump pushed for the cap and vowed to seek Congress’s approval for a one-year limit. Bank of America CEO Brian Moynihan warned the plan could curb credit access, according to Reuters. (Reuters)
CBS News reported that the administration hasn’t clarified how it plans to enforce the cap, leaving banks and investors uncertain about compliance risks. TD Cowen analyst Jaret Seiberg noted that Treasury Secretary Scott Bessent “understands how this could limit credit card lending,” adding: “We expect he will quietly push back … though a higher cap is possible.” (CBS News)
Bank stocks face pressure from next week’s macroeconomic schedule. PNC’s chief investment strategist Yung‑Yu Ma called the recent market volatility “a short but steep roller-coaster ride” in a Reuters “Week Ahead” article. Meanwhile, Oxford Economics’ chief U.S. economist Michael Pearce suggested the Fed might opt for “an extended pause” with policy hovering near neutral. (Reuters)
The first tests arrive fast: durable goods orders, a delayed report, drop Monday. Tuesday brings the Conference Board’s consumer confidence index. Thursday sees weekly jobless claims, with more delayed data rolling out later in the week. (Kiplinger)
The setup works both ways. A better-than-expected growth or inflation report could lift yields and force investors to rethink bank margins. On the flip side, softer data might reignite worries that rate cuts are eroding net interest income faster than credit losses drop. Even a modest move toward a binding credit-card cap could drag profitability back into the spotlight—something banks hoped was off the table.
Bank of America’s next clear trigger comes with the Fed’s wrap-up of its two-day meeting on Jan. 28. The rate decision lands at 2:00 p.m. ET, followed by Chair Jerome Powell’s press briefing at 2:30 p.m. ET. (Federalreserve)
