Bank stocks drop as Treasury yields sink amid election uncertainty

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Banks stocks took a broad hit Wednesday, to buck the rally in the broader market, as an uncertain election outcome triggered safe-haven buying, sending Treasury yields lower. The SPDR Financial Select Sector ETF fell 1.3% in premarket trading. Among the ETF’s most heavily weighted components, shares of J.P. Morgan Chase & Co. dropped 2.4%, Bank of America Corp. slid 3.0%, Citigroup Inc. shed 2.4%, Wells Fargo & Co. declined 2.5% and Goldman Sachs Group Inc. gave up 1.2%. The yield on the 10-year Treasury note tumbled 11.1 basis points to 0.771%. Lower longer-term interest rates can hurt bank profits, as it narrows the spread banks earn on longer-term assets, like loans, which are funded by shorter-term liabilities. The bank stock selloff comes as S&P 500 futures rose 1.4%.
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