Zacks Equity Research
Zacks Equity Research

The U.S. equity markets closed on a positive note on Friday, riding on the Finance sector’s rally. More importantly, the S&P 500 Financials (Sector) index rose nearly 2% and the Zacks categorized Finance Market industry gained 1.5% compared with 0.7% growth for S&P 500.

The signing of executive order by the President Donald Trump to ease regulations on the financial industry was the primary reason for the rally. Also, improved jobs report for January supported it.

Some of major finance stocks that surged on Friday include Morgan Stanley (MSFree Report) , The Goldman Sachs Group, Inc. (GSFree Report) , JPMorgan Chase & Co. (JPMFree Report) , Bank of America Corporation (BACFree Report) , Citigroup Inc. (CFree Report) , The Charles Schwab Corporation (SCHWFree Report) and Invesco Ltd. (IVZFree Report) . These stocks jumped in the range of 2.5–5.5%.

The President has been always in favor of lesser regulations on the finance industry. Hence, the finance sector stocks have been witnessing a rally since the election results in November. Since that day, the Zacks categorized Finance Market industry gained 14% outpacing 6.8% growth for S&P 500.

Why Prospects for Lesser Regulations Cheered Finance Sector

Since the 2008 financial crisis, the finance sector has been in spotlight for heightening the meltdown. So with an aim to curb reckless lending and prevent the need for tax-payers money to bailout large financial institutions, The Dodd-Frank Act was signed into federal law in 2010.

Several provisions for the Act led the finance sector companies to…