U.S. Bancorp provided a bright spot for the sector, reporting record second-quarter revenue. The firm’s performance was driven by robust loan growth and diversified fee income, bolstered by a one-month contribution from its recent acquisition of the financial-services firm BTIG.

Despite the positive market reaction, Federal Reserve officials remain cautious. Kansas City Fed President Jeffrey Schmid acknowledged that recent inflation data shows encouraging signs of deceleration, but urged against overreacting to a single report. He maintains that risks remain tilted toward inflation, even as the labor market holds in balance.