Financial Stocks Plunge as Real Interest Rates Rise

Financial stocks declined on Tuesday afternoon as the NYSE Financial Index dropped by 0.7% and the State Street Financial Select Sector SPDR ETF (XLF) fell by 0.6%. The Philadelphia Housing Index plummeted by 1.1%, while the State Street Real Estate Select Sector SPDR ETF (XLRE) decreased by 0.5%. Bitcoin's price slipped 1% to $83,089, and the yield for 10-year US Treasuries rose 4 basis points to 5.29%.

Equifax shares dropped by 3.9%, while TransUnion shares fell by 4.7% after US Federal Housing Finance Agency Director Bill Pulte stated that VantageScore will join the existing FICO classic mortgage pricing grid, operated by VantageScore Solutions, a private joint venture owned by Equifax, Experian, and TransUnion.

Fair Isaac (FICO) shares plummeted past 25% following Pulte's announcement. The decline in financial stocks was attributed to the rapid rise in real interest rates, which Goldman Sachs believes has exerted direct pressure on the US stock market, particularly affecting rate-sensitive sectors such as small-cap and financial stocks.