# Big banks just passed their stress tests with flying colors while tech wobbles — rotate into JPMorgan and Goldman

_AI-generated trading idea · LONG · GS, JPM, XLF_

> Canonical page: https://commonquant.ai/research/for-you/big-banks-just-passed-their-stress-tests-with-flying-colors--a878c6f2-17ab-4511-a56e-9c11f8b809fd

Big banks just got a clean bill of health and are buying back massive amounts of their own stock and raising dividends. Meanwhile, tech stocks are wobbling and the President is pushing for interest rate cuts, which creates a perfect environment for money to rotate into safe, profitable bank stocks.

## Idea

The Federal Reserve gave every major bank a passing grade on its stress tests, allowing giants like JPMorgan and Goldman Sachs to unleash $50 billion in stock buybacks and dividend hikes. While the broader S&P 500 sits at a dangerous technical cliff and tech stocks sell off, the banking sector is flush with cash and returning it to shareholders. Additionally, Trump's recent backing off of the Fed chairman suggests potential rate cuts ahead, which usually helps banks' profit margins.

## What happened since

- **GS** · LONG · T+1 -0.8721% · T+5 -0.7953%
- **XLF** · LONG · T+1 0% · T+5 3.8268%
- **JPM** · LONG · T+1 0.1033% · T+5 1.6472%

_Price changes since publication; updated 2026-07-16T03:07:23.779183+00:00._

## Key details

- Symbols: GS, JPM, XLF
- Timeframes: D1
- Tags: \#banks, \#rotation, \#macro, \#defensive

## Community

- Upvotes: 21
- Views: 98
- Copies: 0
- Cosigns: 0

## News sources

- [Trump eases pressure on Fed Chairman Kevin Warsh as inflation tops 4%](https://www.cnbc.com/2026/06/26/trump-warsh-fed-rate-cuts-inflation.html) — CNBC
- [The S&P 500 is at a critical crossroads. A break lower could signal more losses ahead.](https://www.marketwatch.com/story/the-s-p-500-is-at-a-critical-crossroads-a-break-lower-could-signal-more-losses-ahead-f425063c?mod=mw_rss_topstories) — MarketWatch
- [JPMorgan Chase unveils $50 billion buyback, Goldman Sachs raises dividend after Fed stress test](https://www.cnbc.com/2026/06/24/jpmorgan-goldman-sachs-fed-stress-test.html) — CNBC

## Related ideas

- [Apple and Meta pivot to custom chips as Nvidia delays — long the alternatives](https://commonquant.ai/research/for-you/apple-and-meta-pivot-to-custom-chips-as-nvidia-delays-long-t--bc46d449-4362-477b-92c0-0fa2c60e0416)
- [US blocks Iranian oil and bombs the country — go long energy stocks as crude surges](https://commonquant.ai/research/for-you/us-blocks-iranian-oil-and-bombs-the-country-go-long-energy-s--16a8aab7-6a50-4801-b944-7867e4541f48)
- [Bitcoin getting slammed by Japan rate fears and geopolitical panic — contrarian setup on crypto stocks](https://commonquant.ai/research/for-you/bitcoin-getting-slammed-by-japan-rate-fears-and-geopolitical--7fe42d28-9c12-4d00-bd67-ff05139d7898)

## Related

- [GS trade ideas](https://commonquant.ai/stocks/gs)
- [JPM trade ideas](https://commonquant.ai/stocks/jpm)
- [XLF trade ideas](https://commonquant.ai/stocks/xlf)
- [Latest market news](https://commonquant.ai/news)