US Banks: Reading the Tea Leaves: Beginning of the end? Not so fast.

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US Banks: Reading the Tea Leaves: Beginning of the end? Not so fast.

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US Banks: Reading the Tea Leaves

Beginning of the end? Not so fast.

Industry Overview

Hot jobs print forces a rethink 07 June 2026 Corrected

Markets sold off Friday on a hotter-than-expected jobs print, forcing a repricing of the

EquityFed path. The key signal, however, came from relative performance: bank stocks (BKX)

United Statesoutperformed the S&P by 175bp and the Nasdaq by 330bp. Beneath the surface, the

Bankstape was even more telling—Wall Street banks lagged (GS -4.9%, MS -2.9%), while Main

Street held in better (WFC +0.4%, PNC +1.4%), with regionals (KRE) outperforming Ebrahim H. Poonawala

money centers by 120bp. Our read: Friday’s price action likely reflected a rethink of ResearchBofAS Analyst

crowded trades (AI/chips, crypto), not the market pricing a hard landing. Relevant +1 646 743 0490

research: US Banks: Reading the Tea Leaves: Peak Wall Street? ebrahim.poonawala@bofa.com

Brandon Berman

All eyes on Kevin Warsh ResearchBofAS Analyst

10yr yields rose +6bp to 4.53%, 2yr +10bp to 4.15%, with 2s/10s flattening to 38bp vs. +1 646 855 3933

brandon.berman@bofa.com

73bp peak on Feb 3. Markets are assigning 40% probability to a Dec Fed rate hike, up

Gabriel Angelini

from 26%. During an Expert Insights call we hosted on Friday, Mark Cabana, co-head of Research Analyst

Global Rates Research for BofA, highlighted the likelihood of incoming Fed Chair Kevin BofAS

+1 646 855 3081

Warsh taking a more hawkish tilt as he looks to build consensus with FOMC members. gabriel.angelini@bofa.com

Such a scenario would push rate hike probabilities higher and drive further “bear Michael Campos

flattening,” with short rates rising faster than long rates. Call replay available on request.