Investors struggled to assess the fallout from the second- and third-largest bank failures in U.S. history Monday. In short, bank stocks got crushed in sometimes record ways, but the overall market didn't experience the same pain due to hopes the Fed will back off its economy-crushing interest rate hikes. After the tech and startup-focused Silicon Valley Bank and the crypto-focused Signature Bank both collapsed, regional bank stocks were hit hard. The iShares US Regional Banks ETF—which, as the name suggests, tracks regional bank stocks in the U.S.—cratered over 14% on Monday, and firms based on the West Coast fared the worst. First Republic Bank saw its stock tank another 62% on Monday after last week’s 33% drop, while shares of PacWest Bancorp and Western Alliance Bancorp sank 21% and 47%, respectively. The rapid plunge of the sector led exchanges to temporarily halt trading in dozens of regional bank stocks.
Investors’ fear spread to the wider financial services sector as well. Shares of Bank of America dropped roughly 6%, while Wells Fargo was down around 7% and Charles Schwab cratered 11.5%. But the financial services sector’s pain wasn’t reflected in the overall market Monday.
