“We knew some of this was coming and the downgrades reflect things that the market has already digested and taken into account,” said Jack Janasiewicz, portfolio manager and chief strategist at Natixis Investment Managers. “It’s just a reflection of the general sentiment,” he added.
Among midsize banks, Western Alliance Bancorp and PacWest Bancorp fell more than 3%. Michael Burry’s Scion Asset Management had revealed on Monday that it had sold its stake in both banks. Comerica and KeyCorp also suffered falls of more than 4%.
Benchmark 10-year US Treasury yields hit their highest level in nearly 10 months on Tuesday at 4.274% before falling sharply on expectations the Federal Reserve could hold interest rates for longer.