US bank shares rise after inflation data
2023.06.13 16:06
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© Reuters. JPMorgan Chase Bank is seen in New York City, U.S., March 21, 2023. REUTERS/Caitlin Ochs
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By Manya Saini
(Reuters) – Shares of U.S. banks rose on Tuesday after inflation data backed the view that the Federal Reserve will keep interest rates unchanged on Wednesday while leaving the door open for more hikes later that will further boost interest income.
U.S. consumer prices barely rose in May and the annual increase in inflation was the smallest in more than two years, though underlying price pressures remained strong.
The data lifted the Banks Index 1.5%, while the KBW Regional Banking Index gained about 1.6%.
The S&P 500 Banks Index is up 5.4% this month, through Monday’s close.
Higher net interest income has helped cushion a slump in the banking sector’s market-sensitive business units such as investment banking and trading.
On Tuesday, Wells Fargo (NYSE:) CFO Mike Santomassimo said the lender expected an upside to interest income this year going ahead.
JPMorgan Chase (NYSE:), Wells Fargo, Goldman Sachs (NYSE:), Morgan Stanley (NYSE:), Citigroup (NYSE:) and Bank of America (NYSE:) advanced between 1% and 2.7%.
Regional lenders also rose. PacWest Bancorp, Western Alliance (NYSE:), Comerica (NYSE:), U.S. Bancorp, State Street (NYSE:) and KeyCorp (NYSE:) gained between 2.5% and 5%.
Missing the rally were shares of Zions Bancorporation (NASDAQ:) after executives said at a conference that interest income at the regional lender was trending toward. Shares were last down 3.1%.
