What Happened?
A number of stocks fell in the afternoon session after investors reacted to escalating trade tensions between the US and China following President Trump's announcement of a potential 'massive increase' in tariffs on Chinese imports.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company Cadence Bank (NYSE:CADE) fell 3%. Is now the time to buy Cadence Bank? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company BankUnited (NYSE:BKU) fell 3.8%. Is now the time to buy BankUnited? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Banc of California (NYSE:BANC) fell 3.9%. Is now the time to buy Banc of California? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Atlantic Union Bankshares (NYSE:AUB) fell 3.9%. Is now the time to buy Atlantic Union Bankshares? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Banc of California (BANC)
Banc of California’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 3.5% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points yesterday and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
Banc of California is up 8.6% since the beginning of the year, and at $16.56 per share, it is trading close to its 52-week high of $17.81 from October 2025. Investors who bought $1,000 worth of Banc of California’s shares at the IPO in November 2023 would now be looking at an investment worth $1,332.
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