Bank stocks broadly traded down March 31 after President Donald Trump announced two executive orders designed to steer the country's trade relationships toward an "America first" policy.
The first executive order commissions a report detailing the country's trade deficits with other nations and the reasons for those deficits, which will in turn guide policy on how to reform trade relationships on a country-by-country basis. The second executive order will direct the Commerce Department, Department of Homeland Security, U.S. Trade Representative, and the Treasury Department to enforce countervailing duties and crackdown on violations of U.S. trade and customs laws.
"Our mission is to defend American workers, defend American manufacturers and producers," National Trade Council Director Peter Navarro said.
Max Wolff, market strategist at asset management firm 55 Capital, said protectionist trade policies could hurt internationally exposed companies, especially banks. Wolff said that if Trump abandons certain trade relationships, U.S. banks could be cut off from cheap capital abroad.
"It's not just bad for importers, it's bad for exporters," Wolff said. "Because when everyone hates you they don't buy [your] stuff."
The SNL U.S. Bank Index fell 1.06% to 535.84. All major banks took a hit in trading, with JPMorgan Chase & Co. falling 1.34% to $87.84, Citigroup Inc. declining 1.14% to $59.82, Bank of America Corp. losing 1.17% to $23.59, and Wells Fargo & Co. slipping 1.03% to $55.66.
In comparison, the broader markets had modest losses. The Dow Jones Industrial Average lost 0.31% to 20,663.22, the S&P 500 declined 0.23% to 2,362.72 and the Nasdaq composite index ticked down 0.04% to 5,911.74.
In notable movers, Honesdale, Pa.-based Norwood Financial Corp. jumped 5.46% to $41.12 and Newton, N.C.-based Peoples Bancorp of North Carolina Inc. added 4.06% to $29.70. Clearfield, Pa.-based CNB Financial Corp. fell 5.54% to $23.89 and Grand Rapids, Mich.-based Mercantile Bank Corp. slipped 2.63% to $34.40.
In thrifts, the SNL U.S. Thrift Index declined 0.72% to 918.88. Westfield, Mass.-based Western New England Bancorp added 2.44% to $10.50 while San Diego-based BofI Holding Inc. dropped 5.26% to $26.13 after disputing the factual accuracy of a New York Post story claiming that the bank is under federal investigation.
New York Community Bancorp Inc., meanwhile, fell 1.90% to $13.97.
Market prices and index values are current as of the time of publication and are subject to change.