Fed Stress Test Signals Bank Resilience, Paves Way For Billions In Capital Returns To Shareholders

Shares of major U.S. banks rose Monday morning after all 22 institutions passed the Federal Reserve’s annual stress test, according to Reuters. The results signaled resilience in the face of economic downturns and paved the way for billions in dividends and stock buybacks. The results indicate that U.S. lenders remain financially strong and capable of continuing to lend during a crisis. Goldman Sachs, Wells Fargo, Citigroup, and M&T Bank were seen as top performers, benefiting from declines in their stress capital buffers. Analysts cited the results as a net positive for the sector, noting stronger capital positions and improved investor sentiment. The S&P 500 Banks Index climbed nearly 1% and has outperformed the broader S&P 500 so far this year.