ETMarkets.comLast Updated: Oct 17, 2026, 12:24:00 AM IST

Synopsis

Major US banks are experiencing their longest weekly losing streak since the 2008 financial crisis, driven by mixed quarterly earnings and rising inflation. The KBW Bank Index has fallen about 13% since its August peak, continuing a trend of losses. Concerns about artificial intelligence disrupting financial services contribute to the negative sentiment toward the sector. Analysts highlight challenges involving elevated interest rates potentially slowing economic growth.

Shares of major US banks headed for their longest weekly losing streak since the 2008 global financial crisis after mixed quarterly earnings failed to improve sentiment toward the struggling sector, Bloomberg News reported.

The 24-member KBW Bank Index fell about 1.3% during the week and remained in correction territory, having declined roughly 13% from its August record. Although the group had suffered steeper selloffs—including a nearly 17% decline earlier in the year—it was on course for a sixth consecutive weekly loss, its longest such run since 2008.

Bank stocks had already come under pressure amid concerns about how artificial intelligence could disrupt financial services. A hotter-than-expected inflation reading added to uncertainty over how aggressively the Federal Reserve would act to rein in persistent price pressures.

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According to Bloomberg Intelligence analyst Herman Chan, large banks faced several challenges, including the prospect of interest rates remaining elevated for longer, which could slow economic growth and increase loan losses. Third-quarter results did little to reverse the weakness, as disappointing fixed-income trading offset strength in equities.

Persistent weakness in bank shares also raised concerns about the wider economy because lenders played a key role in supporting growth through credit.

Chan said rising funding costs for AI companies had created fresh uncertainty about the durability of capital-markets revenue linked to infrastructure investment. He added that agentic AI could pose a longer-term threat to the stable, low-cost deposits that supported bank profitability.

The KBW Bank Index underperformed the S&P 500 in 18 of the 21 trading sessions following the Fed’s September 16 interest-rate increase, Barclays analyst Jason Goldberg wrote. He said no comparable rolling 21-session stretch had occurred since the index was created in May 1992.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)

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