More major banks released their earnings on Wednesday, but their shares are declining.

Main Highlights

• Bank shares declined on Wednesday as several major financial institutions released mixed results for the fourth quarter.
• This week has been challenging for financial stocks, with President Trump's recent suggestion to limit credit card interest rates and concerns over an inquiry into Federal Reserve Chair Jerome Powell contributing to market unease.

On Wednesday, shares of leading banks continued their downward trend as the latest earnings announcements failed to halt recent declines.

Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) each saw their stock prices drop by around 5% following the release of their quarterly earnings. Other prominent banks, such as JPMorgan Chase (JPM) and Goldman Sachs (GS), also experienced declines in their share values.

While Bank of America and Citigroup managed to surpass most analyst expectations, Wells Fargo's performance fell short, reinforcing the mixed nature of this earnings season. The reporting period began yesterday with JPMorgan, which revealed stronger revenue but lower profits than anticipated.

Investor Perspective

Investors closely monitor quarterly reports from major banks to gauge the overall health of the economy. They also pay attention to executives' commentary regarding consumer strength and potential economic risks.

Brian Moynihan, CEO of Bank of America, expressed optimism about continued economic growth this year, though he acknowledged several looming risks. His remarks followed those of JPMorgan CEO Jamie Dimon, who noted that while the economy has shown resilience, it still faces challenges such as inflation, elevated asset prices, and global uncertainties.

The losses seen in bank stocks on Wednesday add to a difficult week for the sector. Earlier, many financial stocks fell after President Trump proposed a cap on credit card interest rates. Additionally, the administration's scrutiny of Fed Chair Jerome Powell has further heightened investor concerns.