US stocks declined on Tuesday, with Moody's downgrade of nearly a dozen US lenders pulling bank stocks lower.
The ratings giant also put a handful of larger banks on review notice, including US Bancorp, Bank of New York Mellon, and Northern Trust. The smaller lenders that Moody's officially downgraded include Pinnacle Financial, Webster Financial, and M&T Bank. "US banks continue to contend with interest rate and asset-liability management risks with implications for liquidity and capital, as the wind-down of unconventional monetary policy drains systemwide deposits and higher interest rates depress the value of fixed-rate assets," Moody's analysts wrote in a Monday note.
Meanwhile, corporate earnings continue to surprise to the upside. Already, 89% of S&P 500 companies have reported for the second quarter, and nearly 80% have beaten Wall Street expectations, FactSet data shows. On Thursday, investors will get the Consumer Price Index report for July, which will help inform the Federal Reserve's next policy move.
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