What Happened?
A number of stocks jumped in the afternoon session after easing oil prices reduced inflation and recession risk, with the Russell 2000 heavy in regional banks surging on the session.
The Dow Jones Industrial Average traded higher despite weakness in energy and healthcare stocks while industrial giants and banking shares supported the rally, Investors rotated toward companies expected to benefit from easing oil prices. Still, bond market volatility continued to influence sentiment after the 30 year Treasury yield briefly crossed 5.19%, its highest level in nearly two decades.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company Valley National Bank (NASDAQ: VLY) jumped 2.6%. Is now the time to buy Valley National Bank? Access our full analysis report here, it’s free.
- Regional Banks company Columbia Banking System (NASDAQ: COLB) jumped 2.6%. Is now the time to buy Columbia Banking System? Access our full analysis report here, it’s free.
Zooming In On Valley National Bank (VLY)
Valley National Bank’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 6.6% on the news that disclosures from two lenders raised concerns about deteriorating loan quality across the industry.
The drop was triggered by specific incidents that have spooked investors. Zions Bancorp announced a $50 million charge-off—a debt the bank doesn't expect to collect—on a single loan. Separately, Western Alliance Bancorp revealed it was dealing with a borrower who had failed to provide proper collateral. These events are compounding existing anxieties about the regional banking sector, which is already under pressure from elevated interest rates and declining commercial real estate values.
The news heightened investor concerns that more cracks could appear in borrowers' creditworthiness, potentially leading to increased loan losses and reduced profitability for other banks in the sector.
Valley National Bank is up 14.1% since the beginning of the year, and at $13.34 per share, it is trading close to its 52-week high of $13.77 from April 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Valley National Bank’s shares 5 years ago would now be looking at only $941.74.
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