What Happened?
Shares of regional banking company KeyCorp (NYSE: KEY) fell 2.6% in the afternoon session after a broad market downturn was triggered by a court ruling that deemed most of President Trump's tariffs illegal.
Although the tariffs remain in place pending an appeal, the decision caused Treasury yields and volatility to spike while stocks slumped. This type of market-wide uncertainty often leads investors to sell assets, and financial stocks can be particularly sensitive to sudden shifts in yields and economic sentiment. The negative news was compounded by seasonal trends, as September is traditionally Wall Street's worst-performing month, adding to the day's negative pressure on equities.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy KeyCorp? Access our full analysis report here, it’s free.
What Is The Market Telling Us
KeyCorp’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 4.9% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
KeyCorp is up 11.6% since the beginning of the year, and at $18.95 per share, it is trading close to its 52-week high of $19.97 from November 2024. Investors who bought $1,000 worth of KeyCorp’s shares 5 years ago would now be looking at an investment worth $1,491.
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