New York, December 10, 2025 — After the closing bell
U.S. bank stocks surged on Wednesday after the Federal Reserve delivered a widely expected 25-basis-point rate cut and signaled it may pause its easing cycle, sending major indices to fresh or near-record highs and sparking a sharp outperformance in financial shares. [1]
Below is a detailed look at how U.S. bank stocks traded after the bell on December 10, 2025, and what today’s wave of news, forecasts, and analysis could mean for the sector.
Key takeaways
- Fed delivers a “hawkish cut”: The Fed lowered its policy rate by 0.25 percentage point to a target range of 3.50%–3.75%, its third cut of 2025, while projecting only one further cut in 2026 and stronger growth ahead. [2]
- Bank indices outperform: The KBW Bank Index (BKX) jumped 2.62% to 163.69, and the KBW Regional Banking Index (KRX) climbed 3.31% to 127.99, both beating the S&P 500’s roughly 0.7%gain. [3]
- Big-bank leaders: JPMorgan Chase (JPM) closed at $310.15, up 3.21%, while Citigroup (C) gained just over 2% to around $109, helping drive the sector higher. [4]
- Fresh 2026 outlooks & regulatory headlines: New forecasts from Wells Fargo Investment Institute, bullish commentary from Jim Cramer, upbeat revenue guidance from Bank of America’s CEO, and a high-profile OCC “debanking” report all landed on the same day, shaping how investors are thinking about bank earnings and risk. [5]
Wall Street closes higher after Fed’s third cut of 2025
U.S. stocks finished solidly higher on Wednesday as investors digested a complex mix of dovish action and cautious messaging from the Fed:
- Dow Jones Industrial Average: +1.16% to 48,112.12
- S&P 500: +0.74% to 6,891.18
- Nasdaq Composite: +0.43% to 23,678.63 [6]
The Fed cut the federal funds rate by a quarter point, in a divided vote, and indicated that while inflation is still “somewhat elevated,” it expects GDP growth in 2026 around 2.3% with unemployment near 4.4%, and only one additional rate cut next year. [7]
At the same time:
- The U.S. 10‑year Treasury yield fell to about 4.15%, extending its decline after the announcement. [8]
- The U.S. dollar index weakened modestly, easing financial conditions further. [9]
For bank investors, this combination—lower short-term rates, still-elevated long-term yields, and a solid growth outlook—is close to a textbook “sweet spot.”
Bank indices: KBW Bank and Regional Banking jump
The standout move of the day came from dedicated bank indices:
- KBW Bank Index (BKX)
- Close: 163.69
- Change: +2.62%
- Day’s range: 159.25–164.23
- One-year change: about +23%. [10]
- KBW Regional Banking Index (KRX)
- Close: 127.99
- Change: +3.31%
- Day’s range: 123.83–128.68
- One-year change: roughly –2%, underscoring how today’s jump comes after a bruising 12 months for many regionals. [11]
These gains far outpaced the broader market and suggest that traders see Wednesday’s Fed move as net positive for banks, despite the central bank’s hint that it may pause further cuts.
A steeper yield curve—short rates down after the cut, while longer yields have slipped only modestly—can improve net interest margins, particularly for lenders that fund themselves in short-term markets but lend at longer maturities. [12]
Big U.S. banks: JPMorgan leads, BofA and Citi ride macro tailwind
JPMorgan Chase (JPM): Rebound after cost concerns
JPMorgan was the day’s bellwether among money-center banks:
- Close: $310.15
- Move: +3.21% on the day. [13]
The gain comes right after JPMorgan shares slumped nearly 4.7% on Tuesday when the bank warned about higher 2026 expenses, a sell-off highlighted in pre-close coverage earlier today. [14]
Today’s rebound suggests investors are willing to look through near-term cost pressure given a friendlier rate backdrop and continued strength in JPMorgan’s loan book and trading franchise.
Bank of America (BAC): Positive revenue tone from CEO
Bank of America traded heavily and ended the session in the mid‑$50s per share, roughly in line with levels seen over the past week. [15]
The bigger story came after hours in the form of fresh guidance:
- CEO Brian Moynihan said he expects revenue from BofA’s markets business to grow by high single digits to around 10% in the fourth quarter, with investment banking fees roughly flat. [16]
That outlook supports the narrative that trading and markets revenue can offset softer fee income elsewhere, which is particularly important as lower rates gradually compress net interest margins.
Citigroup (C): Extending a multi-day rally
Citigroup continued its recent uptrend:
- Close: about $109.28
- Move: roughly +2.08% on the day. [17]
Citi has been a relative value play in the sector for much of 2025, and today’s pop keeps the stock near its highest levels of the year as investors reward restructuring progress and aggressive capital returns.
Wells Fargo (WFC) and Capital One (COF): Momentum names stay in focus
For Wells Fargo (WFC), prices around $90–91 leave the stock near multi-year highs after a roughly 128% gain over the past three years, as one widely circulated analysis flagged earlier today. [18]
Capital One Financial (COF) also attracted attention:
- Recent data show COF trading in the low $230s per share after gaining strongly this year. [19]
- In a fresh segment, Jim Cramer highlighted Capital One as the bank with the “most upside” among major lenders, calling bank stocks “all cheap” on a valuation basis. [20]
Cramer’s comments line up with a broader theme: large-cap U.S. banks still trade at forward P/E multiples mostly in the low‑teens, a discount to the broader market despite strong year-to-date performance. [21]
Regional and community banks: Big one-day bounce, lingering risk
Today’s 3.31% jump in the KBW Regional Banking Index underscores how beaten-down regional names are finally getting some relief. [22]
Fresh analysis from Zacks Investment Research, published Wednesday, singled out Bank of New York Mellon (BK) and U.S. Bancorp (USB) as major regional banks well-positioned to benefit from industry restructuring and improving operating trends, highlighting them as “regional banks to buy” in a constructive industry backdrop. [23]
At the same time, coverage of community banks on December 10 stressed that many smaller lenders remain under pressure from:
- Higher deposit costs as savers demand better yields
- The need to invest in digital banking and modernization
- Ongoing regulatory and compliance burdens. [24]
So while today’s rally is significant, it comes against a backdrop where credit quality (especially commercial real estate), funding costs, and regulation still matter a great deal for regionals.
Fresh 2026 outlooks: Wells Fargo sees growth, lower rates and tech tailwinds
Alongside the Fed decision, Wells Fargo Investment Institute (WFII) released its 2026 Outlook report on Wednesday, adding an important top‑down view to bank investors’ playbooks. [25]
Key points from WFII’s new forecast for 2026:
- U.S. GDP growth: target around 2.4%
- Inflation: expected near 2.8%
- S&P 500 target range: 7,400–7,600
- Fed funds rate: forecast 3.00%–3.25% by 2026. [26]
The report argues that technology spending, Fed rate cuts, deregulation and tax incentives should collectively support growth and broaden the equity rally, while encouraging investors to:
- Focus on technology’s transformative potential
- Learn more about digital assets as a potential opportunity
- Diversify beyond a pure U.S. equity bias
- Position portfolios for lower short-term rates
- Use alternatives and private assets to smooth volatility. [27]
For bank stocks, the message is clear: moderate growth + lower but not ultra-low rates is a constructive backdrop for both credit quality and fee-generating capital markets activity.
Separately, Bank of America’s research arm today reiterated a cautious view on the traditional 60/40 stock–bond portfolio, forecasting weak real returns over the coming decade and promoting more diversified, thematic approaches. [28] That indirectly supports interest in sectors like banks that can benefit from higher-for-longer nominal yields and improving earnings, especially relative to expensive mega‑cap growth.
Valuation talk: “The banks are all cheap”
On the single-stock front, valuation took center stage thanks to Jim Cramer’s latest commentary:
- Cramer reiterated on social media and TV that “the banks are all cheap,” pointing to major names including BAC, C, COF, GS, JPM and WFC. [29]
- He described Capital One as the “cheapest of all”, with the most upside relative to his view of fair value. [30]
His argument rests on several points echoed by other analysts:
- Forward P/E ratios for many big banks still sit in the low-teens, versus a much higher multiple for the S&P 500. [31]
- The sector has already absorbed tougher capital and liquidity rules, with 2025 stress tests clearing the way for larger buybacks and dividend hikes. [32]
- Balance sheets generally look stronger than pre‑2023 regional‑bank turmoil, with more stable deposits and higher capital ratios.
Today’s price action, particularly in JPM and Citi, suggests that investors are increasingly willing to pay up for high‑quality banks that can compound book value and return capital consistently.
Regulatory overhang: OCC “debanking” report targets the biggest banks
Not all of today’s headlines were friendly to the sector.
In a report released Wednesday, the Office of the Comptroller of the Currency (OCC) said the nine largest U.S. bankshad, in past years, imposed restrictions on certain controversial industries—a practice commonly referred to as “debanking.” [33]
Key details:
- The OCC review, ordered after an August executive order from President Trump, examined policies between 2020 and 2023. [34]
- The report said large banks had denied or restricted services or applied extra scrutiny to industries such as oil and gas, cryptocurrency, tobacco, and firearms, sometimes beyond the actual financial risk. [35]
- Banks named in the report include JPMorgan, Bank of America, Citigroup, Wells Fargo, U.S. Bank, Capital One, PNC, TD and BMO. [36]
- The OCC warned that it may refer cases to the U.S. Justice Department and pledged to “hold banks accountable” while it continues to review thousands of complaints. [37]
While bank shares did not appear to react sharply to the report today, it reinforces an old lesson for financial investors: regulatory and political risk is never far away, especially for the largest institutions.
Why bank stocks rallied: The mechanics
Today’s surge in bank stocks was driven by a combination of factors:
- Rate cut + steep-ish curve
- Short‑term funding costs for banks will fall as the Fed’s new 3.50%–3.75% policy range filters through, while 10‑year yields remain above 4%. [38]
- That generally supports net interest margins, particularly for banks less dependent on high‑rate promotional deposits.
- Growth still on track
- Fed projections and WFII’s 2026 outlook both call for above‑trend U.S. growth, moderate unemployment, and inflation heading toward the high‑2% range. [39]
- A soft‑landing scenario is good for loan growth and credit quality, two pillars of bank earnings.
- Valuation + positioning
- After a strong year, many banks still trade at reasonable multiples, and sentiment had been cautious heading into the Fed decision. [40]
- That left room for a short squeeze and momentum buying when the Fed delivered exactly what markets hoped for: a cut, but no harsh warning about growth.
- Reinforcing narratives from management and strategists
- BofA’s upbeat markets revenue guidance and WFII’s optimistic 2026 forecasts gave investors more confidence in future earnings power. [41]
What to watch next for bank investors
Even after today’s rally, the bank story is far from over. Key issues to monitor:
- Credit quality, especially in commercial real estate (CRE)
- Regulators and rating agencies remain focused on CRE exposures, particularly at regional and community banks. [42]
- Deposit costs and competition
- If long-term yields fall faster than the Fed cuts short rates, funding costs could stay sticky while asset yields reprice downward.
- Regulation and “debanking” fallout
- The OCC report may lead to new guidance or enforcement actions, potentially affecting how banks manage reputational and ESG-related risks. [43]
- Capital return plans
- As the 2026 Fed outlook and stress test results emerge, investors will closely watch buyback and dividend announcements, particularly from the largest U.S. banks. [44]
- Macro data between now and the next Fed meeting
- The Fed has explicitly tied further moves to incoming data on jobs and inflation, and recent reports have been distorted by the long government shutdown. [45]
Bottom line
As of the close on December 10, 2025, U.S. bank stocks are back in the spotlight:
- The rate cut + growth outlook backdrop is supportive.
- Valuations remain compelling relative to the broader market, according to several high‑profile commentators. [46]
- But regulatory, political and credit risks are still very real, especially for the largest institutions and smaller regionals exposed to CRE and higher-cost funding. [47]
For investors and traders alike, today’s action confirms that bank stocks remain one of the most rate‑sensitive and news‑driven corners of the U.S. market—and that after the bell on December 10, 2025, the bulls had the upper hand.
References
1. www.reuters.com, 2. www.reuters.com, 3. www.investing.com, 4. www.investing.com, 5. www.businesswire.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.investing.com, 11. www.investing.com, 12. www.reuters.com, 13. www.investing.com, 14. www.investopedia.com, 15. stockanalysis.com, 16. www.reuters.com, 17. www.investing.com, 18. stockanalysis.com, 19. finance.yahoo.com, 20. www.benzinga.com, 21. www.benzinga.com, 22. www.investing.com, 23. www.zacks.com, 24. tearsheet.co, 25. www.businesswire.com, 26. www.businesswire.com, 27. www.businesswire.com, 28. www.businessinsider.com, 29. www.benzinga.com, 30. www.benzinga.com, 31. www.benzinga.com, 32. www.wealthmanagement.com, 33. www.reuters.com, 34. www.reuters.com, 35. www.reuters.com, 36. www.reuters.com, 37. www.reuters.com, 38. www.reuters.com, 39. www.reuters.com, 40. www.benzinga.com, 41. www.reuters.com, 42. www.reuters.com, 43. www.reuters.com, 44. www.wealthmanagement.com, 45. www.reuters.com, 46. www.benzinga.com, 47. www.reuters.com
