Shares of bank stocks cut gains sharply on Monday after a report from Bloomberg Television that U.S. President Donald Trump said he was actively considering breaking up big banks.
The S&P 500 bank index quickly retreated following the comment from its session high of 288.46, up 1.2 percent, to 285.71, a drop of nearly 1 percent.
Shares of JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC) and Citigroup (C) all experienced a similar decline.
The selloff was short lived, however, with bank shares recovering within minutes. The bank index was last up 0.9 percent.
Traders attributed the drop and rebound to computer-driven trading, as algorithms scan news headlines and place stock orders.
“It was an extreme reaction off algorithms that read the tape,” said Mark Kepner, managing director, sales and trading at Themis Trading in Chatham, New Jersey.
“It has to be paid attention to, but I wouldn’t be making rash decisions on buying or selling securities because of a one-liner that he just said.”
