Exchange-traded funds that bought bank stocks jumped on Tuesday as investors assessed the latest batch of second-quarter earnings results from Wall Street giants including Bank of America and Morgan Stanley.
The Invesco KBW Bank ETF KBWB,
“It was a busy morning with mixed results from Morgan Stanley and impressive results from Bank of America impression,” said Edward Moya, senior market analyst for the Americas at Oanda, in a note on Tuesday. “We’ve done work with most of the big banks and the overall conclusion is that despite the weak economy and all the turmoil caused by the regional banking crisis last quarter, they’re doing just fine.
The S&P Regional Bank ETF, which tracks an equal-weight index of U.S. regional bank stocks, had its best day on Tuesday since June 6, according to SPDR FactSet data. So far this month, the fund has soared 12 percent. %, on track for its strongest monthly performance since February 2021.
Bank stocks broadly outperformed the S&P 500 on Tuesday, helping lift a popular gauge of U.S. large-cap stocks. S&P 500 SPX Index
Bank of America BAC, +4.42%
The Invesco KBW Bank ETF posted a gain from Biggest one-day gain since June 2, but the fund is still down double digits year-to-date.
Bank ETFs are picking up from regional bank failures earlier this year (including Silicon Valley Bank in March) The Invesco KBW Bank ETF is still down 15% this year as of Tuesday, while the SPDR S&P Regional Banking ETF is down just over 22% in 2023.
Meanwhile , the S&P 500 is up 18.6% year-to-date, driven by big tech stocks, including mega-company Apple Inc. AAPL,
Fund focused on equal weight version of S&P 500 stocks, Invesco S&P 500 Equal Weight ETF RSP,
U.S. stocks generally closed higher on Tuesday, with the Dow Jones Industrial Average (DJIA)