Bank ETFs Fall Into Correction Territory As Key 'Trump Trade' Unwinds

Two of the largest exchange-traded funds to track banks fell into correction territory on Wednesday, the latest sign of how what had been one of the most pronounced "Trump trades" has largely unraveled. The SPDR S&P Bank ETF fell 2.8% to $46.56 on Wednesday. It has dropped 10.6% from a closing high reached on March 1, a level that had been its highest price since 2008. The SPDR S&P Regional Banking ETF fell 2.8% on Wednesday and is down 11.3% since its recent closing high. A correction is defined as a drop of at least 10% from a recent peak. Despite the recent weakness, the bank ETF is up more than 19% since President Donald Trump was elected in early November, the event that sparked the rally in the industry, as investors bet that Trump would push through legislation to deregulate the industry, as well as other economic initiatives to support its profit growth. Wednesday's decline came as political turmoil intensified, weighing on investor sentiment and seeming to make it less likely that Trump could get his agenda passed. Another widely watched financial ETF, the Financial Select Sector SPDR ETF is a few percentage points from dropping into correction territory. More broadly on Wednesday, the Dow Jones Industrial Average , the S&P 500 , and the Nasdaq Composite Index all fell more than 1%.