Shares of U.S. bank stocks are trading lower on Thursday, amid a drop in the yield on the benchmark 10-year treasury note.
The yield fell to 2.037% in the late morning. The drop in yield was due primarily to the European Central Bank, ECB, leaving its benchmark interest rate unchanged on Thursday. The ECB said it will increase its asset purchase program if necessary.
Additionally, yields fell on Wednesday on the hopes U.S. lawmakers would reach an agreement to raise the U.S. debt limit.
Banks benefit from a rising yield curve as the banks profit from wider loan spreads as they can earn more on loans to customer than they pay the Fed. Publicly traded companies in the space include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB) and Wells Fargo (WFC).
