State Street Financial Select Sector SPDR ETF

XLF

Market cap $49.6B

Two must-read reports — the FDIC Bank Quarterly and the Alvarez & Marsal deregulation primer — reveal how eighteen months of regulatory rollback unleashed an extraordinary surge in bank lending to hedge funds, private credit, and the shadow banking ecosystem, while small businesses and farmers wait in line.

U.S. banks reported a 3.6% increase in ​their profits in the first ‌quarter of 2026, rising to $80.5 billion as domestic deposits grew again and banks ​set aside slightly more against ​potential losses, the Federal Deposit Insurance ⁠Corporation reported Wednesday.

If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the State Street Financial Select Sector SPDR ETF (XLF), a passively managed exchange traded fund launched on December 16, 1998.

For much of the past year, investors and bank regulators hoped the U.S. banking system was moving beyond the regional banking turmoil of 2023. Most banks remained profitable, liquidity conditions improved, and fears of a broader financial crisis faded.

The House of Representatives passed bills Tuesday (May 12) that would tailor the supervisory requirements and reduce the frequency of examination for smaller financial institutions that are well managed and well capitalized. The two bills will now be considered by the Senate.

The buybacks are encouraging for investors amid a mixed performance for banking stocks this year.

The Office of the Comptroller of the Currency highlighted artificial intelligence as both a risk and an opportunity for innovation in its spring 2026 Semiannual Risk Perspective. AI is one of several key issues facing banks surveyed in the report released Thursday (May 7).

The Office of the Comptroller of the Currency's latest risk assessment offers a striking message for the banking industry: the U.S. financial system may appear stable on the surface, but underneath, risks are becoming more interconnected, more operationally complex, and potentially more difficult to contain.

The Federal Reserve has held the fed funds target at 3.75% for roughly five months, and the 10-year Treasury yield sits near 4.5%, near the top of its 12-month range.

Strong Q1 earnings momentum continues as S&P 500 firms beat estimates. Tech, Energy lead growth; full-year 2026 outlook stays robust.