U.S. bank index falls for 6 straight weeks in longest losing streak since 2008

Key Facts

The KBW Nasdaq Bank Index fell for 6 consecutive weeks through the week ended October 16, 2026, marking its longest weekly losing streak since July 2008, according to Benzinga. The index tracks shares of 24 of the largest U.S. lenders, as markets monitor risks associated with higher interest rates during the quarterly earnings season. Reuters reported in October, ahead of earnings announcements, that the index had fallen 13% from its August closing peak. The index lost 6% during the third quarter, according to the same report, before banks announced their results for that period. The agency identified rising deposit costs and deteriorating credit quality among the risks investors were watching as interest rates climbed.

In a development involving Bank of America, the U.S. Treasury Department announced enforcement actions on October 13 imposing penalties exceeding $1.21 billion for violations of anti-money laundering and sanctions laws. The department said the bank failed to report suspicious transactions worth more than $5 billion in a timely manner during the period covered by the actions. According to the Office of Foreign Assets Control, the bank agreed to pay $11,662,930 to settle its potential civil liability for 475 apparent violations of sanctions programs. Under the Financial Crimes Enforcement Network's order, a payment of $750,000,000 to the Office of the Comptroller of the Currency is credited toward the monetary penalty owed to the network. The Treasury actions also require the bank to undergo an independent review of the effectiveness of its suspicious activity monitoring system, alongside the settlement's financial obligations.

Bank of America reported net income of $6.9 billion in its third-quarter 2026 disclosure, including the impact of the regulatory settlement. Diluted earnings per share were $0.91, according to the bank's quarterly results disclosure. Excluding the settlement charge, adjusted net income was $8.1 billion, a non-GAAP measure, according to the earnings statement. The bank reported revenue growth of 3% from the same period a year earlier alongside its earnings announcement. Revenue, net of interest expense, reached $30.0 billion in the third quarter, according to the bank's statement.

In its banking operations, Bank of America's net interest income rose 8% year on year to $16.4 billion in the third quarter. The bank attributed the growth primarily to higher loan and deposit balances, along with the repricing of fixed-rate assets. It also cited interest income associated with global markets activities among the factors supporting this revenue item. In results from another major U.S. bank, JPMorgan Chase reported quarterly net income of $15.3 billion. That represented a 6% increase from the same period a year earlier, according to the bank's third-quarter earnings statement. Its trading businesses delivered mixed results, with fixed-income markets revenue falling 4%, while equity markets revenue rose 49% year on year.

The results follow the Federal Reserve's decision in September 2026 to raise its target interest rate range by a quarter of a percentage point. The target range became 3.75%–4% under the decision announced by the Federal Open Market Committee in its September 16 statement. The Fed said in the statement that "inflation remains elevated," outlining one element of the economic backdrop to the rate increase. The U.S. central bank described economic activity as "expanding at a solid pace" in its assessment of economic conditions at the time of the decision. Risks of rising deposit costs and deteriorating credit quality were a focus for investors ahead of bank earnings announcements, according to the Reuters report on the impact of higher interest rates.

For Bank of America, the Financial Crimes Enforcement Network's order requires it to propose an independent consultant to conduct a historical review of transactions covered by the order's requirements. The order set a deadline of 60 days from its execution date to submit the proposed consultant, among the obligations following the regulatory settlement announced in October. On monetary policy, the next Federal Open Market Committee meeting is scheduled for October 27 and 28, 2026, according to the Federal Reserve's calendar. That follows September's rate increase and comes as banks report third-quarter results covering developments in interest income and trading businesses. The October meeting will be followed by another committee meeting on December 8 and 9, according to the U.S. central bank's official meeting calendar.