Investing.com - Financial stocks were mostly lower midday, as investors fretted about the plunge in the Turkish lira and its impact on the global banking system.
The S&P Finance Sector index fell about 1.2% at 11:25 AM ET (15:25 GMT).
The lira tumbled double digits to a fresh historic low against the U.S. dollar after President Donald Trump announced he was doubling tariffs on steel and aluminum for Turkey. The two countries are locked in a dispute over Turkey’s detention of a U.S. pastor.
USD/TRY surged about 15% midday, not far from an all-time high of 6.6170 earlier in the session.
Earlier on Friday, Turkish President Tayyip Erdogan urged Turks to exchange gold and hard currency into lira, framing the crisis as a "national battle" against economic enemies.
The currency’s decline raised fears about how much exposure banks have to Turkey. European banks have the most exposure, but U.S. banks are owed about $18 billion, according to the Bank of International Settlements.
Shares of Citigroup (NYSE:C) fell about 2.2% midday. Goldman Sachs (NYSE:GS) was off about 1.5%, while Morgan Stanley (NYSE:MS) fell 1.5%. Bank of New York Mellon (NYSE:BK) lost about 2.4%.
Elsewhere, semiconductor and semiconductor equipment stocks struggled after Microchip Technology (NASDAQ:MCHP) warned on upcoming quarterly revenue. The stock tumbled about 12%. Microchip said on its earnings call talk about tariffs and a potential trade war is making its customers “nervous.”
Texas Instruments (NASDAQ:TXN) fell about 3.6% and KLA-Tencor (NASDAQ:KLAC) lost about 2.5%, Intel (NASDAQ:INTC) was down close to 2.4% and Analog Devices (NASDAQ:ADI) was off around 3%.