What Happened?
A number of stocks fell in the afternoon session after the Fed signaled rate cuts were off the table for 2026.
Major Wall Street banks, including Goldman Sachs and Bank of America, pushed back their forecasts for Federal Reserve interest-rate cuts.
The revised timelines, pointed to December 2026 instead of September, after stronger-than-expected jobs and inflation data suggested the economy might not be cooling enough to warrant earlier action from the central bank. This shift in expectations led to a rise in Treasury yields. Some analysts at Bank of America even noted that the risk of the Fed hiking rates again might be 'underpriced' by the market, signaling a potentially prolonged period of higher interest rates.
Banks earn money on the difference between what they charge borrowers and pay depositors, the net interest margin. Rate cuts are a mixed signal: they compress margins but stimulate loan demand. With the Fed signaling no cuts, banks lose the demand catalyst needed to grow lending volume.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company Regions Financial (NYSE: RF) fell 3.2%. Is now the time to buy Regions Financial? Access our full analysis report here, it’s free.
- Regional Banks company FirstSun Capital Bancorp (NASDAQ: FSUN) fell 3.2%. Is now the time to buy FirstSun Capital Bancorp? Access our full analysis report here, it’s free.
Zooming In On FirstSun Capital Bancorp (FSUN)
FirstSun Capital Bancorp’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock dropped 6% on the news that the company reported first-quarter 2026 results that missed analyst expectations, driven by weaker credit quality.
The bank's adjusted earnings per share came in at $0.84, slightly below the Wall Street consensus of approximately $0.87. The miss was primarily due to a significant increase in net charge-offs, which are debts the bank doesn't expect to collect. These charge-offs jumped to $10.6 million for the quarter, a substantial rise from $0.6 million in the previous quarter.
According to the company, more than $10 million of this total was linked to just two soured loans in its commercial portfolio. As a result of these credit issues, FirstSun increased its provision for credit losses to $8.3 million, more than double the amount set aside in the same period a year earlier, raising investor concerns about the health of its loan book.
FirstSun Capital Bancorp is down 5% since the beginning of the year, and at $35.92 per share, it is trading 13.2% below its 52-week high of $41.40 from October 2025. Investors who bought $1,000 worth of FirstSun Capital Bancorp’s shares at the IPO in August 2022 would now be looking at an investment worth $1,497.
ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.
AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.
