U.S. bank stocks have continued their decline, with executives warning of a slower-than-expected recovery in investment banking and an anticipated decrease in net interest income (NII) due to upcoming Federal Reserve rate cuts. JPMorgan led the decline with a 5.2% drop earlier this week, as COO Daniel Pinto described current NII forecasts as overly optimistic. Analysts note that while lower interest rates may help stimulate spending, they will also compress banks' earnings from loans. This sentiment was echoed across major banks, with Morgan Stanley and Citigroup also projecting reduced interest income for the third quarter. The market reaction was exacerbated by a hotter-than-expected consumer price index report, leading traders to adjust expectations for a smaller interest rate cut by the Fed. Overall, the combination of executive caution and economic indicators has created a bearish outlook for bank stocks.