U.S. banks stay liquid as 10-year yield hits 4.61%

The setup is more favorable for the largest lenders than in past tightening cycles. JPMorgan Chase ended July 29 at $344.71, above its 50-day moving average of $324.66 and 200-day average of $308.79, while Bank of America closed at $61.07, also above its 50-day and 200-day averages. Citigroup fell to $127.13 after a recent run-up, but remains well above its 200-day average of $117.79.

Investors have mostly treated the sector as a beneficiary of resilient capital returns rather than a funding-risk story. Bank of America’s board raised its quarterly dividend to $0.32 a share from $0.28 after second-quarter net income of $9.1 billion, or $1.21 a share, and the stock has climbed sharply since early spring.

The more important backdrop is that banks are still showing access to diversified liquidity sources even as some foreign-bank debt issuance softens. That reduces the odds of a repeat of the kind of wholesale funding stress that hit smaller and more rate-sensitive lenders in prior cycles, and leaves the biggest U.S. banks better positioned to keep lending, buy back stock and raise dividends.

For investors, the key question is whether rising Treasury yields and still-tight policy begin to bite into credit quality or funding costs later this year. For now, the market is signaling that capital strength and liquidity buffers remain the dominant story, not stress.