Tech is tanking but big banks just passed their stress tests with flying colors — safety rotation into JPMorgan and Goldman
The tech-heavy market has been sliding all week, but the Federal Reserve just gave big banks a clean bill of health. With JPMorgan and Goldman Sachs immediately launching massive stock buybacks and dividend hikes, investors looking for safety outside of the volatile tech sector have a strong alternative.
Idea
The S&P 500 and Nasdaq have fallen for three straight days as investors dump expensive tech stocks, creating a need for capital to rotate into safer, fundamentally sound sectors. In a stroke of good timing, the Fed's annual stress test showed all 32 large banks can weather a severe recession, prompting JPMorgan to announce a massive $50 billion buyback and Goldman Sachs to raise their dividend. Wall Street analysts are also pointing out that small-cap stocks, which are heavily weighted toward financials and domestic growth, are having their best first half of the year since 1991. Combining the tech weakness with the green light from the Fed creates a compelling argument to rotate out of volatile tech and into fortress bank stocks that are actively returning cash to shareholders.
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News sources
- Markets News, June 24, 2026: S&P 500, Nasdaq Fall for 3rd Straight Day; Oil Prices Drop to Lowest Level Since Start of War — Yahoo Finance
- Small caps are booming this year. Here are Wall Street's top smaller picks — CNBC
- JPMorgan Chase unveils $50 billion buyback, Goldman Sachs raises dividend after Fed stress test — CNBC