Bank stocks got crushed Monday morning after President Donald Trump said he’s putting a one-year cap on credit card interest rates. He posted it on Truth Social that:- “Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%.”
Markets didn’t wait. They dumped. Citigroup dropped 4.32% before regular trading even opened. JPMorgan Chase fell 2.64%. Bank of America slid 2.4%. Visa dropped 1.71%. Mastercard went down 1.83%. American Express tanked the most, down 4.95%. Wells Fargo lost 2.07%, and Morgan Stanley dipped 0.98%.
PayPal tried to recover, just barely sitting above zero. Barclays in London collapsed as much as 4.8%, its worst single-day drop since October. Capital One lost 10% in minutes.
Trump’s 10% cap catches financial giants off guard
Trump’s post was blunt. “Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%,” he wrote. Then he added, “We will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”
Nothing about how it would actually work. No mention of what happens to existing balances. Just a demand. Technically, it would need Congress to pass it. But there’s already been support for this idea. Democrats and Republicans have introduced bills in the past with the same 10% limit. So this isn’t coming out of thin air.
Barclays took one of the hardest hits for a reason. Its U.S. bank unit makes most of its money from credit cards. It has 20 million American customers. They offer store cards, small business cards, co-branded cards, basically the whole package.
They recently grabbed Gap’s card program away from Synchrony, and took over GM’s card business too. So yeah, they’re deep in this. That’s why they’re bleeding.
Earnings week starts with bad timing for the sector
Now here’s the kicker. This all happened right before earnings season kicks off for the big banks. JPMorgan reports Tuesday morning. It’s expected to post record revenue and profits again.
On Wednesday, Bank of America, Citigroup, and Wells Fargo will show their numbers. Thursday brings Goldman Sachs and Morgan Stanley. Analysts think all six will report more profit than last year. They’re also expecting record trading fees. That is except for Wells Fargo, which has a smaller investment banking team. But even they’re on track to post a new high in dealmaking fees.
Saul Martinez from HSBC said, “Everything is going up at the same time, right now.” He pointed to more lending, market gains, and big profit jumps.
Last year was huge. The KBW Nasdaq Bank Index jumped 29% in 2025. The S&P 500 only rose 17%. Ebrahim Poonawala from Bank of America said he sees this year as the third straight win for banks. “Banks outperformed the S&P 500 for three consecutive years in late 1990s, and then again in early 2000s. We see similarities to both,” he told clients.
He also said the profit setup this year is the best since the 2008 crash.
That might explain why investors went in hard last year. JPMorgan, Bank of America, Citigroup, and Wells Fargo all jumped 40% on average in 2025. But it wasn’t all earnings.
Steven Chubak at Wolfe Research broke it down: only a third of that came from profit growth. The rest came from what people were willing to pay for those profits. That confidence just took a hit.
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