JPMorgan Chase and other financial stocks came under pressure Tuesday, after Fitch Ratings cautioned there's additional pain ahead for the U.S. banking industry. The ratings agency warned it may downgrade dozens of banks including JPMorgan.
Bank shares generally retreated, with JPM stock, a Dow Jones component, down more than 2%.
Moody's slashed ratings for several small and midsize banks last week and alerted potential cuts for another 17 lenders.
Fitch cut its assessment of the industry's health in June. However, that rating cut largely went unnoticed as it didn't trigger any specific bank downgrades. Analyst Chris Wolfe told CNBC that lowering the industry's score another notch, to A+ from AA-, would force Fitch to reevaluate ratings for more than 70 U.S. banks.
The firm lowered the industry's score to AA- from AA in June based on the "operating environment" as pressure persists following the string of bank failures from March.
In a positive indicator, all 23 banks in this year's stress test survived a hypothetical "severe" recession scenario, the U.S. Federal Reserve announced in June.
JPM Stock, Bank Action
JPM stock faded 2.4% Tuesday, moving toward a rising 50-day line.
The SPDR S&P Regional Banking ETF slumped 2.2%, extending an August retreat.
Bank of America shares slipped 2.3%, nearing its 50-day line after losing support at the 200-day line a week earlier. Wells Fargo fell 1.9%, below the 50-day line and testing its 200-day.
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