Bank stocks fall in early September after 2024 closing high at August-end

US bank stocks reached the highest closing price of 2024 at August-end before new economic data in early September renewed fears of a cooling economy. Markets fell Sept. 3 through midday Sept. 6 as stocks tumbled for the second time in as many months.

The KBW Nasdaq Bank index fell 0.5% between Aug. 28 and Sept. 4, but fared better than the S&P 500, which fell 1.3% over the same period. Just before the decline, the KBW Nasdaq Bank index finished recovering from a more drastic sell-off in August and closed at its highest level in 2024 on Aug. 30.

Markets fell again Sept. 3, however, and dropped further after the US Labor Department released a Sept. 4 report that showed US job openings falling to 7.7 million in July from 7.9 million in June and 8.8 million in July 2023. The Federal Reserve's Sept. 4 "Beige Book," a summary of anecdotal information on current economic conditions, offered another sign of a slowing job market.

"Employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook," according to the Beige Book.

Worst performers

Although the KBW Nasdaq outperformed the S&P 500, more than 140 individual bank stocks underperformed it.

Penns Woods Bancorp Inc. had the worst-performing stock for the week with a return of negative 7.3% while NewtekOne Inc. was the second-worst performer with a return of negative 6.7%. The company also had the third-worst performing bank stock during the week ended Aug. 28. The third-worst performer for the week ended Sept. 4 was Primis Financial Corp. with a return of negative 5.9%.

First Northwest BancorpBest performers

Amid the broader decline, 49 banks still posted positive stock price returns during the week.

First Northwest Bancorp had the best one-week stock performance among US banks with a return of 6.1% during the period. Franklin Financial Services Corp. was the second-best performer with a return of 5.9% and Sound Financial Bancorp Inc. rounded out the top three performers with a 5.5% return.

Sell-off continues following mixed jobs report

The sell-off continued Sept. 6 as the Bureau of Labor Statistics released its August jobs report. According to the report, US employers added 142,000 jobs during the month and unemployment dipped to 4.2% from 4.3% in July. The bureau also made downward revisions to its June and July reports by a total of 86,000 jobs.

The KBW Nasdaq Bank Index had fallen 2.23% from the previous day's close as of 12:27 p.m. ET on Friday, while the S&P had fallen 1.75%.