# Risk-On Momentum in Bank Stocks Echoes Aftermath of Dot-Com Bust > Source: > Published: 2026-08-13 12:03:55+00:00 (Bloomberg) -- The recent weakness in artificial intelligence high-flyers has investors rotating into the less glamorous corner of the market: financial stocks. Most Read from Bloomberg - [Walter Sells Lakers, Seeks More Cash to Pay Loans Amid DOJ Probe](https://www.bloomberg.com/news/articles/2026-08-12/lakers-owner-walter-seeks-cash-to-pay-down-loans-amid-doj-probe?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) - [Phoebe Gates Knew Phia Shopping App Took Credit for Sales It Didn't Drive](https://www.bloomberg.com/news/articles/2026-08-11/phia-app-co-founders-pushed-for-features-taking-credit-for-sales-it-didn-t-drive?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) - [Anthropic Said in Talks to Buy Startup Decart for $6 Billion](https://www.bloomberg.com/news/articles/2026-08-13/anthropic-said-in-talks-to-buy-ai-startup-decart-for-6-billion?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) - [Trump Weighs Call for Capital Gains Tax Cuts as Midterm Boost](https://www.bloomberg.com/news/articles/2026-08-11/trump-weighs-call-for-capital-gains-tax-cuts-as-midterm-boost?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) The group has been the S&P 500 Index's second-biggest gainer in the past three months, trailing only healthcare stocks. That's put the KBW Bank Index of the largest lenders on track to beat the broader equities gauge for a third consecutive year. That would mark the index's longest streak of outperformance since 2003. As worries are swirling around lofty valuations of tech megacaps, investors are moving money into firms that provide all the funding for the AI buildout. And to some on Wall Street, rock-solid earnings in the sector coupled with signs the economy is humming along mean the momentum in banks has more room to run. "You're starting to see evidence that banks are among the greatest beneficiaries of the tech and AI revolution," said Wells Fargo & Co. analyst Mike Mayo. "Banks benefit from AI capex and the echo effect on the top line and the efficiency benefits on the bottom line." The KBW Bank Index has advanced in each of the past four sessions, widening its rally this year to 18%. That compares with a 13% gain in the S&P 500 during that time. The latest CPI report, which showed consumer prices rose 3.4% in July from a year earlier, could present another tailwind for the sector. Since 1990, when inflation was between 3% and 3.5%, financials have tended to outperform the broader market by the most among other sectors, data compiled by Bespoke Investment Group show. A steepening of the Treasury curve, in which long-term yields rise faster than short-term rates, is one reason why Fundstrat Global Advisors' Mark Newton is overweight the broader financials group. The dynamic widens the gap between what banks earn on long-term loans versus what they pay on shorter deposits. Newton sees the group outperforming further and says any recent weakness across financial subsectors is a buying opportunity — "especially because the selloff in the bond market is likely to continue in the weeks ahead," he said. Read: US Core Inflation Comes in Subdued, Easing Pressure on Fed For most of 2026, banks have largely been a sideshow to the AI trade the market has been fixated on. More recently though, they began to benefit as an "AI-adjacent" sector that's still less volatile than semiconductor stocks, known for their boom-and-bust cycles.