Fed Rate Hike Sends JPMorgan, Wells Fargo and Goldman Sachs Lower

24/7 Wall St··US·Read original
3▲1 ▼3Impact / 5
Summary · why it matters

The Federal Reserve lifted its target range to 4% on September 17, 2026, its first hike in three years, yet bank stocks fell instead of rallying as textbook finance would predict. JPMorgan Chase dropped 1%, Wells Fargo dropped 3%, and Goldman Sachs gave back 4%, even as prime rates rose the next day. The move was the most telegraphed hike of the year and the sector had already priced it in, with the SPDR S&P Regional Banking ETF up 12.6% over the past year and 13.55% year to date, while JPMorgan itself sits on a 13.75% one-year gain and a 151.42% five-year run. The 10-year minus 2-year spread closed at 0.25% on September 18, down from 0.74% in February, compressing the very spread the hike was supposed to widen. JPMorgan's Q2 2026 results showed adjusted EPS of $6.14, ROTCE of 23%, and net interest income up 10%, with management guiding full-year NII to about $105.5 billion and raising the quarterly dividend to $1.65 per share, but CFO Jeremy Barnum warned deposit costs eventually catch up and Jamie Dimon said conditions are getting close to as good as it gets. JPMorgan's card net charge-off rate already sits at 3.33% and its allowance for credit losses climbed 12% to $31.4 billion, while the bank authorized a $50 billion buyback in July and delivered $21.16 billion of Q2 net income. The stock trades near $349.47, well above the $308.21 average Q2 buyback price, leaving the deciding variable in Q3 net interest margin and card losses.

Impact on assets 5

Financials▼
Goldman Sachs Group Inc
GS
▼ NegativeMonetaryrelevance

Goldman Sachs fell 4% as the Fed's rate hike failed to widen the yield curve, compressing the spread banks rely on.

Wells Fargo & Company
WFC
▼ NegativeMonetaryrelevance

Wells Fargo fell 3% as the Fed's rate hike compressed the yield curve rather than widening it.

Digital Finance & Tokenization▼
JPMorgan Chase & Co
JPM
▼ NegativeMonetaryrelevance

JPMorgan dropped 1% after the Fed hiked rates but the 10Y-2Y spread compressed, and CFO warned deposit costs will catch up.

Others▲