This sector is in desperate need of a rate hike

Out of all those in the market speculating on the Federal Reserve's next move, investors in at least one struggling sector may be hoping for a rate hike.

Financial stocks have gone from leading the S&P 500 early this summer to become the worst-performing sector in the last month. Within the sector, bank stocks have been the hit the hardest, falling 9.6 percent in one month.

"The financials were some of the best-performing sectors because we all expected that Fed rate hike in September," Erin Gibbs of S&P Capital IQ said Wednesday on CNBC's "Power Lunch."

The Federal Reserve is scheduled to hold its Federal Open Market Committee meeting next week, and some expect the Fed to increase its target on the federal funds rate.

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"It's only in August, when we started seeing the devaluation of China that we started seeing questions about whether it's going to be raised in September, and then of course, questions about the banks," Gibbs said.

In one month, Citigroup, Bank of America and Wells Fargo have tumbled more than 12 percent, 10 percent and 9 percent, respectively.

However, Gibbs said she sees long-term value in the financials sector, which will see a boost whenever the Fed does decide to raise rates. She said bank stocks will also be aided by a strong economy and lower legal costs.

But Todd Gordon of TradingAnalysis.com said the divergence between the 30-year bond yield and the S&P financials sector ETF (XLF) signals more trouble ahead, especially if the market continues to slide.

"They're not immune to general market weakness here," Gordon said on "Power Lunch."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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