Fed Rate Hikes Are Good for Banks—Unless They End in a Recession

Interest rates are going up, but bank stocks aren’t.

JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley have slumped this year after two years of big pandemic gains. All four banks are off their 52-week highs by more than 20%, including a 28% drop at JPMorgan. That compares with a 14% drop in the S&P 500.