Key Highlights

  • FAZ rose 3.27% to $34.39 on Friday, October 23, 2026, from an implied prior close near $33.30 (calculated).
  • A minus 3x fund implies the Financial Select Sector Index fell about 1.09% (calculated, before fees).
  • Flagstar earned $0.01 a share as its provision for credit losses rose to $76 million from $18 million.
  • Among 32 regional banks that reported on October 22, 24 beat EPS estimates and seven missed.
  • Berkshire Hathaway, JPMorgan and Visa carried 12.72%, 11.29% and 8.80% of the XLF fund on October 21.

FAZ Move: Why Is a Bear Fund Up 3% as Bank Shares Slip?

The Direxion Daily Financial Bear 3X ETF (NYSEARCA:FAZ) rose 3.27% to $34.39 on Friday, October 23, 2026. It seeks minus 300% of the daily return of the Financial Select Sector Index, so the index fell roughly 1.09% (calculated by dividing 3.27% by three).

Large lenders drove much of it. JPMorgan (NYSE:JPM) was quoted 1.68% lower at $330.90 and Goldman Sachs (NYSE:GS) 1.18% lower at $880.80 in early quotes, with the declines coming alongside a softer session across the Dow and biotech.

Index Composition: How Much Of the Move Is Berkshire, JPMorgan and Visa?

The index is concentrated. As of October 21, an XLF fund held Berkshire Hathaway (NYSE:BRK.B) at 12.72%, JPMorgan at 11.29%, Visa (NYSE:V) at 8.80%, Mastercard (NYSE:MA) at 6.38% and Bank of America (NYSE:BAC) at 4.18%, so payments and diversified companies matter as much as lenders. The fund held 80 stocks, and the index's own top three were at 12.34%, 11.70% and 8.15% on September 30, so the concentration is stable.

Goldman reported third-quarter revenue of $18.7 billion on October 13, including $6.44 billion from equities trading, while fixed-income and rates trading fell short of expectations. Several research firms trimmed price targets afterwards, and the group has since leaned on credit quality and rate direction rather than trading revenue.

Regional Banks: Are Credit Costs Starting to Bite?

Regional results have mostly cleared estimates. Of 32 banks that reported on October 22, 24 beat EPS estimates, seven missed and one matched, though Popular (NASDAQ:BPOP) lifted its 2026 net charge-off outlook to 80 to 90 basis points from 55 to 70.

On Friday, Flagstar Financial (NYSE:FLG) reported net income of $12 million, or $0.01 a share, down from $0.06 in the second quarter, as the provision rose to $76 million. Net interest income grew 5% to $460 million, but management moved full realization of its targets to 2028 from 2027, citing higher-for-longer rates and New York rent rules effective October 1. First Citizens (NASDAQ:FCNCA) also reported before the open.

The Treasury 10-year yield was 4.96% on October 22, after a 17 basis point fall from 5.13%.

Fund Structure: How Does the Daily Reset Affect FAZ?

Direxion launched FAZ on November 6, 2008. It trades on NYSE Arca, charges 1.03% and held about $89 million in assets. If the index drops 1.09% and then recovers 1.09%, it ends about 0.01% lower, but the fund gains 3.27% and then loses 3.27%, finishing about 0.11% lower (calculated, before fees).

The Federal Reserve decides on October 28, and Q3 GDP follows on October 29. This article is informational only, and daily-reset funds carry volatility and decay risks.