Regional Banks Hit Six-Month Low, Broader Markets Decline Ahead of Fed Meeting

Regional banks, represented by the KBW Regional Banking Index and the SPDR S&P Regional Banking ETF ($KRE), are experiencing significant declines. The KBW Regional Banking Index has hit a six-month low, currently down 1%. The SPDR S&P Regional Banking ETF ($KRE) is nearing its lowest level since April and is underperforming the S&P 500 ($SPY) by the largest margin in history. Additionally, $KRE has closed below the 200-day moving average (200dma) for the first time since November 21, 2023. This decline comes ahead of the Federal Reserve's meeting this week. Broader financial markets are also showing weakness, with the UK FTSE and German DAX hitting new monthly lows, and the Russell 2000 ($RUT) and Financial Select Sector SPDR Fund ($XLF) also reaching new monthly lows. The Russell 2000 is also down on the year, often referred to as 'small crappers'. $KRE is testing its record low versus the S&P 500 following SVB's collapse last year.