Futures fell after Trump said the U.S. will raise tariffs on more than $500 billion worth of Chinese imports, increasing trade tensions.Marketsread more
Clouding the G-7 gathering, which represents the world's major industrial economies, are the tit-for-tat tariffs between Washington and Beijing.Politicsread more
Hours after President Trump said Sunday he had "second thoughts" about escalating the trade war with China, the White House sought to explain his remark because it was...Politicsread more
President Donald Trump said that he would have a major trade deal with U.K. after it leaves the European Union.Politicsread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
Despite Kudlow's expectations, China said on Saturday that it strongly opposes Trump's decision to levy additional tariffs on $550 billion worth of Chinese goods, and warned...Politicsread more
President Donald Trump said Sunday he was not happy after North Korea launched short-range ballistic missiles over the weekend.Politicsread more
Bryn Mawr Trust CIO Jeffrey Mills lists where to put money to work as Wall Street copes with trade war and recession jitters.Futures Nowread more
The announcement for Target also comes on the heels of a strong quarterly earnings report, where it showed it drove more people to stores and got them to spend more money...Retailread more
The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Traders are begging the Federal Reserve for several rate cuts this year to salvage an economy they see set to slow significantly because of worsening trade disputes. The market cheered this week when Fed Chairman Jerome Powell opened the door to the possibility.
But if the central bank did cut rates, a group of important stocks to the market would suffer.
Large-cap banks could see their earnings on a per share basis decline by 10%, on average, if the Fed lowers rates by 75 basis points, according to Bank of America Merrill Lynch.
"Lower short-term rates are expected to negatively impact bank earnings," said Erika Najarian, financials analyst at Bank of America said in a note Wednesday. "Feedback from bank management teams implies mixed sentiment over the ability to cut deposit rates quickly."
Bank margins could take a hit if they are paying out deposit rates at a higher level than market rates. Their earnings are also hurt when the spread between short-term and long-term rates flattens, a phenomenon that could worsen if the Fed cuts.
Bank stocks already took a hit recently as Treasury yields sank on concerns about a slowing global economy. The SPDR S&P Bank ETF tumbled 10% in May as the yield on the 10-year Treasury note plummeted 14% last month. Part of the so-called yield curve also inverted amid the escalating trade war between the U.S. and China, and now possibly Mexico, sending a recession signal watched by the Fed and experts.
The stocks were notably red on the board Wednesday as the rest of the market continued to rally for second day after Powell said the Fed will "act as appropriate to sustain the expansion, " essentially opening the door to rate cuts.
Traders are pricing in a more than 90% chance of a September rate cut and about 60% probability of three rate cuts this year, according to the CME FedWatch tool. Bank of America's economists believe there will be three reductions by early next year. Barclays now also expects a 75 basis point cut this year.
J.P. Morgan's earnings could get slashed by 10% by year-end 2020, if the Fed lowers interest rates by 75 basis points, according to Bank of America. Regional lenders including Citizens Financial and M&T Bank could take an even bigger hit from a rate decrease.
"Banks are not expected to benefit as much this cycle (vs. past cycle) from cutting deposit costs given the lower absolute level in rates today," Najarian said.
However, some banks are better positioned to slash deposit costs following any rate cut. Citigroup and Signature Bank both have above-average deposit costs and larger percentages of money market accounts, so they should have less impact from Fed rate cuts, Bank of America said. BB&T should also outperform due to its merger with SunTrust, the bank said.
— CNBC's Michael Bloom contributed to this report.