Bank of America: The peak of tariff confusion has passed and bank stocks will outperform the market.

The Bank of America says that the stock performance of Wall Street banks is expected to outperform the S&P 500 index, as the chaos triggered by tariffs may have peaked. "Tariffs caught the market off guard, but the 'peak chaos' may have passed," analysts Ebrahim H. Poonawala and others wrote in a report released on Wednesday. They stated that despite the uncertain and volatile economic environment, bank profitability has remained strong, and the earnings revisions of bank stocks have been better than the S&P 500 index so far this year. By 2024, bank stocks are expected to outperform the S&P 500 index, with the KBW Bank Index rising 33% while the S&P 500 index rises 23% during the same period. However, this year, the performance of bank stocks has been more in line with the benchmark index, with the KBW index rising by less than 1% compared to a 1.7% increase in the S&P 500 index.