Financial Stocks Decline After U.S. Credit Card Rate Cap Proposal

Financial stocks in the United States and the United Kingdom declined following comments by U.S. President Donald Trump proposing a cap on credit card interest rates.

Major U.S. lenders recorded losses, with shares of JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all trading lower. Consumer-focused finance firms were hit harder, as investors reacted to the potential impact on interest income.

Payment processing companies also came under pressure, reflecting concerns that a rate cap could dampen transaction volumes and profitability.

Market analysts noted that implementing such a cap would likely require legislative approval and could face significant legal hurdles. They also warned that banks might respond by tightening credit access, particularly for higher-risk borrowers, potentially pushing some consumers toward alternative lenders.

Average credit card interest rates in the U.S. remain above 20 per cent, underscoring the scale of the proposed adjustment.

Investors are expected to closely monitor commentary from bank executives as earnings season progresses, with major lenders scheduled to release quarterly results during the week.