Bank Stocks Have Worst Start to Year Since 2023 as Results Loom

With war raging in the Middle East and private credit fears shaking markets, shares of Wall Street’s biggest banks are off to their worst start to a year since the regional banking crisis. But with the stocks now trading at relatively cheap valuations, strong earnings next week could spark a rally.

The KBW Bank Index sank 6% in the first quarter, its weakest quarterly performance since 2023, when stocks reeled amid the turmoil in regional banks. The soft start to this year followed a strong performance in 2025, with the gauge soaring 29% to outpace the S&P 500 and Nasdaq 100 indexes.