New York, February 7, 2026, 13:20 EST — Market closed
Financial stocks in the U.S. wrapped up the week on a stronger note. The Financial Select Sector SPDR Fund (XLF), which tracks the sector, closed Friday at $54.26, up 1.8%. Goldman Sachs advanced 4.3%, JPMorgan Chase tacked on 3.9%, and Citigroup jumped 6.0%.
Wall Street came roaring back Friday, sending the Dow Jones Industrial Average to its first-ever close above 50,000—up 2.47%—as investors shifted cash into sectors outside tech after this week’s AI-driven rout. “You’re seeing broadening … other than just the tech, AI trade,” said Chuck Carlson, chief executive at Horizon Investment Services. The Dow’s up 4.3% in 2026 so far. 1
Financial stocks could soon get another push from interest rates. San Francisco Fed President Mary Daly said in 2026, one or two additional cuts might be necessary, warning that workers are “walking a knife’s edge.” The Federal Reserve left its main rate steady at 3.50%-3.75% last week. Daly told Reuters that policymakers need to keep “a very open mind” about their next steps. 2
U.S. consumer sentiment edged higher in early February, with the University of Michigan index touching 57.3—a level not seen in six months. But most of that optimism came from households with significant stock portfolios, highlighting the “K-shaped” nature of the economy. “We may have seen the trough in consumer sentiment,” said Oren Klachkin at Nationwide, while cautioning it’s too soon to expect a strong rebound. Survey chief Joanne Hsu flagged persistent anxiety about high prices and job security. One-year inflation expectations slipped to 3.5%. Longer-term, they nudged up to 3.4%. 3
The path of rates is key for lenders, directly hitting what banks pull in from loans against what they shell out to depositors—that’s the net interest margin. If cuts arrive quickly, that gap can tighten. Still, looser policy can juice borrowing, dealmaking, and trading.
Investors are eyeing whether the move into banks and brokers can stick, especially as funding costs and credit quality draw scrutiny while parts of the economy cool. But a rapid shift in Treasury yields could upend the trade in a hurry.
Still, that rebound risks unraveling if inflation doesn’t cool and the Fed keeps its foot on the brake. A sudden hit to the labor market could also shift investor bets toward a sharper slowdown. Both situations spell trouble for loan growth and could sap risk appetite across the sector.
Monday’s session puts the spotlight on upcoming U.S. labor and inflation data. The Bureau of Labor Statistics is set to release January’s employment numbers Feb. 11 at 8:30 a.m. ET, with the January CPI following two days later, Feb. 13, also at 8:30 a.m. ET. 4
