Why Charles Schwab (SCHW) Stock Is Falling

Charles Schwab Corporation Common Stock SCHW shares are trading lower by 2.6% to $64.26 Tuesday morning. Shares of banking and financial services stocks at large are trading lower after Moody's cut the credit ratings of 10 banks and placed others under review for potential downgrades.

Negative actions on credit ratings of regional banks can lead to a broader negative sentiment within the financial sector. Investors might interpret this as a sign of increased credit risk and financial instability across the industry, which can impact all financial institutions, including brokerage firms like Charles Schwab.

See Also: What's Going On With C3.ai Stock Today?

If regional banks are facing credit rating downgrades due to challenges such as loan quality, economic conditions or other factors, investors might fear that similar problems could affect brokerage firms. This can lead to concerns about the overall health of the financial sector, including firms like Charles Schwab.

What Happened?

Moody’s action comes amid worries about rising financing costs, possible weaknesses in regulatory capital, and escalating risks linked with commercial real estate lending. These concerns are heightened by the declining demand for office space.

“Although the general drain on deposit funding caused by quantitative tightening (QT) moderated in Q2, there remains a significant risk that systemwide deposits will resume their decline in the coming quarters,” Moody’s stated in the report...Read More

According to data from Benzinga Pro, SCHW has a 52-week high of $86.63 and a 52-week low of $45.00.