Financial stocks slump as JPMorgan’s Dimon issues ‘hurricane’ warning (NYSE:BAC)

The Financials sector is dropping the most of S&P 500 industry sectors on Wednesday after JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon warned that an economic “hurricane” is approaching.

The SPDR Financial Select Sector ETF (NYSEARCA:XLF) is down 2.4% approaching the noon hour (NY time) after Dimon said the bank is “bracing itself”. His comments came after the Bank of Canada raised its policy rate by 50 basis points to 1.5% and said it may need to act “more forcefully” to bring inflation down to its 2% target. In addition, the Federal Reserve will soon start shrinking its $8.9T balance sheet.

Both megabank and regional bank stocks are falling: Wells Fargo (NYSE:WFC) -2.8%, Citigroup (NYSE:C) -2.6%, Goldman Sachs (NYSE:GS) -3.0%, Morgan Stanley (NYSE:MS) -2.5%, Bank of America (NYSE:BAC) -2.5%, U.S. Bancorp (USB) -2.6%, Truist Financial (TFC) -2.5%, PNC Financial (PNC) -2.8%.

Custody banks are especially hard hit: Bank of New York Mellon (BK) -3.3%, State Street (STT) -4.0%, and Northern Trust (NTRS) -2.9%.

The prospect of economic pain ahead is also taking its toll on credit card issuers American Express (AXP) -2.7%, Synchrony Financial (SYF) -4.2%, Capital One (COF) -3.3% Discover Financial (DFS) -3.0%, and Bread Financial (BFH) -3.0%. Auto and subprime lenders: Ally Financial (ALLY) -4.6% and Credit Acceptance (CACC) -3.4%.

Just about every subsector is firmly in the red, including insurance, mortgage REITs, fintech, and asset managers.

See also: Dow Jones, S&P 500, Nasdaq drop as cyclicals struggle