President Trump criticized credit card issuers, suggesting a 10% interest rate cap, causing bank stocks to plummet. Although unlikely to become law, this proposal could significantly impact banks and ETFs holding their stocks. Major credit card issuers like Capital One, Citigroup, JPMorgan Chase, American Express, and Bank of America saw significant declines.

Financial sector ETFs like State Street’s Financial Select Sector SPDR ETF (XLF), Vanguard’s Financials ETF (VFH), and iShares US Financials ETF (IYF) dropped over the past five days. The White House’s pressure on the Federal Reserve Chair and a proposal to limit banks from buying single-family homes are adding to market uncertainty. Diversification is key for financial services company holdings amidst this turbulence.

Read more at Yahoo Finance: Credit Card Rate Cap Undermines Bank ETFs After Year of Strong Growth