By Andrew Welsch

Financial stocks can't catch a break. Investors dumped shares of banks, brokerages, and other financial services companies on Friday morning after the U.S. economy was shown to be shedding jobs and the war with Iran roiled oil markets.

The KBW Nasdaq Bank Index fell as much as 4.5% at the open before paring some of its losses; the index was down 3.7% at 10 a.m. The Vanguard Financials ETF, which tracks a basket of financial services companies, was down 2.4%.

The selloff hit marquee consumer banks such as Citigroup and Wells Fargo, which fell 4.1% and 3.6%, respectively. Morgan Stanley, which operates large wealth management and investment banking businesses, dropped 3%. The company announced layoffs this week. Brokerage firm Robinhood Markets was down 3.6%.

Although banks' performance metrics have been holding up and CEOs have expressed confidence in the resilience of the American consumer, financial stocks have been taking hits in recent weeks because of a range of concerns about the economy, the direction of Federal Reserve rates, stubborn inflation (likely to get worse because of the war in Iran), and trouble in private credit. The Vanguard Financials ETF is down 8.5% this year.

The U.S. and Israeli war with Iran has caused oil prices to spike. And Friday's disappointing jobs report, which showed the U.S. economy shed 92,000, is giving investors fresh reasons to be concerned about potential stagflation. Shares of robo-advisor Wealthfront, whose business is sensitive to interest rates, slid 3.5% on Friday.

In addition to concerns about the macroenvironment, investors have also been on guard against potential disruptions from artificial intelligence. Shares of wealth management companies sold off sharply last month after fintech Altruist introduced a new tax-planning function for its AI platform Hazel. Wealth management stocks got no relief on Friday. LPL Financial's stock was down 2.9% while Raymond James Financial fell 3.3%.

Write to Andrew Welsch at andrew.welsch@barrons.com

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March 06, 2026 10:48 ET (15:48 GMT)

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