Regional Banks Tumble as Traders Sell First, Ask Questions Later

A brutal rout in regional bank stocks is highlighting a view that is taking hold among jittery traders: Sell now, ask questions later.

The S&P Regional Banks Select Industry Index plunged 6.3% on Thursday, its worst drop since April’s tariff-induced selloff and an echo of the stomach-churning declines that rocked the sector during a crisis in 2023. This time around, the slide came after Zions Bancorp and Western Alliance Bancorp said they were the victims of fraud on loans to funds that invest in distressed commercial mortgages. Both lenders saw their shares tumble more than 10%.