why did it drop today

I'd be happy to help, but I need a bit more context. Could you let me know:

  1. Which stock or asset are you asking about? (e.g., AAPL, TSLA, NVDA, S&P 500, oil, etc.)

Once you tell me the ticker, I can pull the latest price action and recent news to help explain today's move.

schwab

I'll pull today's intraday price action and recent news for Charles Schwab (SCHW).

Let me chart today's intraday action so you can see the move.

Data MAX

Why Schwab (SCHW) Dropped Today (Jun 18, 2026)

Today's move: SCHW opened at $94.60, hit an intraday low of $93.25, and was last trading around $93.27 — down roughly ~1.3% on the day (one outlet cited a 3.14% intraday move, which matches the low-to-open gap). Notably, the broader Banking & Investment Services sector was actually up +0.11%, so SCHW underperformed.

Main drivers cited in today's news flow

  1. Hawkish Fed surprise. The first FOMC meeting chaired by Kevin Warsh signaled a possible rate hike later this year — not the cuts the market had been hoping for. Higher rates + rising bond yields hit financials broadly, and Schwab (which depends heavily on net interest margin from sweep cash and fixed-income flows) is one of the most rate-sensitive names in the group.

  2. Schwab's own mid-year outlook turned cautious. Schwab research published a mid-year outlook the same day flagging:

    • Sticky inflation
    • Negative real wage growth straining consumers
    • Geopolitical risk
    • Bonds becoming more competitive vs. equities on a risk-adjusted basis

A bearish internal note from the issuer itself tends to weigh on the stock.

  1. SpaceX IPO capital rotation. Schwab was a major retail platform for the record-breaking SpaceX IPO (CEO Rick Wurster said it was one of the top 5 market events in Schwab's 55-year history, with ~140,000 customer calls on day one). The narrative: retail investors pulled capital out of existing holdings (including SCHW shares) to fund SpaceX allocations — a temporary liquidity reallocation effect.

Bigger-picture backdrop (not just today)

  • SCHW is still down ~13% from its 52-week high of $107.50 (Feb 10, 2026).
  • The dominant 2026 narrative remains "AI disruption of sweep cash" — fears that AI-powered cash-optimization tools will redirect client cash out of Schwab's low-yield sweep deposits, compressing net interest revenue. Q2 earnings in mid-July will be the key test.
  • Cash-sweep litigation (similar to the JPMorgan case) is another overhang.
  • Valuation: P/E (TTM) ~18.5x vs. 5-yr median ~24.9x — GuruFlags GF Value pegs fair value around $102.52, suggesting ~9% upside from current levels. Wall Street consensus remains a Strong Buy, avg PT $118.21.

Bottom line

Today's drop is a mix of (a) a hawkish-Fed shock hitting a rate-sensitive stock, (b) an unusually bearish in-house market outlook, and (c) temporary capital rotation into the SpaceX IPO that Schwab itself is helping distribute. None of it changes the underlying AI/cash-sweep thesis — Q2 earnings in July are the next real catalyst.

but wont higher interest rates increase absolute NIM?

Great question — yes, in absolute dollar terms higher rates do expand NIM for Schwab, which is exactly why the rate-sensitivity angle isn't a slam-dunk bearish story. The nuance:

Why higher rates should help NIM

  • Schwab earns the spread on roughly ~$400B of client sweep cash parked in bank deposits. If the Fed raises rates, those deposit rates don't all pass through 1:1 to clients — the spread widens.
  • This is why Schwab's revenue grew 22% in 2025 and why CFO raised 2026 revenue growth guidance to 14–15% at the May Investor Day.

So why is SCHW down on a hawkish Fed?

A few reasons it's not straightforwardly bullish:

  1. The transmission mechanism. When the Fed hikes, the short end of the curve goes up, but bond prices fall. Schwab holds a large HTM/AFS securities book, and rising rates can mark down the value of those holdings (OCI hit). The market often punishes the stock on duration risk even when NIM expands.

  2. The bigger 2026 narrative is "AI drains sweep cash," not rates. The dominant overhang all year has been fears that AI cash-optimizers will pull deposits out of Schwab regardless of the rate level. A hawkish Fed reinforces that fear by raising the alternative yield clients could earn elsewhere — making it more attractive to move cash out of low-yield sweep.

  3. Yield-curve shape matters more than the level. Schwab's NIM benefits most from a steep, stable curve (paying low on deposits, lending/investing higher). A hawkish Fed that inverts or flattens the curve hurts more than it helps.

  4. Schwab's own bearish note. Same-day commentary from Schwab research warning bonds are now competitive with equities doesn't land well when the equity in question is a rate-sensitive bank.

Net-net

You're right that in isolation, higher absolute rates = wider NIM = more earnings for Schwab. The selloff today reflects:

  • Curve/duration risk (bond portfolio marks down)
  • Capital rotation to alternatives (including bonds, money market funds at 5%+, and the SpaceX IPO)
  • Reigniting the AI/sweep-cash drain fear at exactly the moment alternative yields become more attractive

The bull case (which analysts like Barclays at $127 PT are sticking with) is that NIM expansion + 14–15% revenue growth still wins out, and the AI-cash fear is overblown. Q2 earnings in mid-July will be the real test.

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