Bank stocks fell after bad news at SVB Financial

US bank stocks fell by the most in nearly three years on Thursday as investor sentiment surrounding the sector continued to deteriorate.

The KBW Bank Index fell 7.7%, the biggest one-day drop since June 2020. SVB Financial Group was the gauge’s biggest decliner, falling a record 60% after the Silicon Valley-based lender took steps to boost its capital position following losses on its securities portfolio. Other major bank stocks are also lower, along with Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. all slide by at least 5%.

“Bank stocks have traded poorly this week after KeyCorp warned about high deposit betas and the sell-off was boosted on Thursday thanks to double wins by Silvergate and SVB Financial,” said Vital Knowledge founder Adam Crisafulli.

Thursday’s decline completely erased a strong start to 2023 for bank stocks. The KBW Bank Index rose more than 14% to start the year, but declines in four of the past five weeks pushed the benchmark back into the red.

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