“What we’re seeing is a combination of defense positioning, with people taking some profit out of the high-growth areas, technology specifically, and rotating into sectors that should hold up better if we get any negative news on tax bill or the debt ceiling,” Jonathan Mackay, investment strategist at Schroders, told Reuters.
Mackay argued that investors may be adjusting expectations to catch up with the Fed on rate policy through financial stocks.
Potentially further bolstering the financial segment, the U.S. tax bill that is making its rounds through Congress could slash business tax rates. Partisan committee vote has set up a full vote by the Senate as soon as Thursday.
For more information on the financial sector, visit our financial category.