why are bank stocks down today

Bank stocks are down today mainly due to concerns over a likely U.S. government shutdown starting October 1, 2025, as Republicans and Democrats have failed to reach a funding agreement. This political impasse creates uncertainty in the market, leading to cautious investor sentiment and pressure on bank shares. Additionally, there are lingering concerns about weaker loan growth, increasing slippages in banks’ asset quality, shrinking margins, and stress in certain retail and microfinance loan segments that have affected banking stocks recently. The government shutdown could temporarily furlough around 900,000 federal employees, delaying critical economic data releases, which adds to market volatility. Investors are also worried about broader economic growth and fiscal policy uncertainty, which influence banks’ profitability and stock performance. These factors combined have led to a broad sell-off in bank stocks today amid cautious market sentiment.