The banking sector is now the real pillar supporting the world’s main stock indexes, which have been weighed down by declines in the technology sector. Among the major stock indexes, Italy stands out, up 15.75% since the beginning of 2026, supported precisely by its banks. The FTSE MIB banking sector is advancing even faster than its U.S. counterpart, including giants such as JPMorgan and Goldman Sachs.

Italy Beats Wall Street, Driven by Its Markets

Since the beginning of 2026, the FTSE MIB has risen 15.75%, but almost all the banks have outperformed the index, as shown in the table below. Mediobanca has surged 55.58%, followed by Monte dei Paschi at 24.22% and BPER at 20.26%.

Banco BPM has also risen 20.05%, while the two main giants remain behind. UniCredit has nevertheless posted a gain of 14.68%, while Intesa Sanpaolo is up just 9.73%, affected by the banking-sector consolidation wave.

Intesa Sanpaolo’s Record First-Half Results

Just yesterday, Intesa Sanpaolo (ISP) approved its first-half results, reporting net profit of €5.6 billion. The figure represents growth of 6.5% compared with the same period in 2025 and exceeds analysts’ expectations. The bank improved its guidance, meaning its official earnings forecast, and now expects 2026 profit to exceed €10 billion.

The performance of ISP stock is heavily affected by the banking-sector consolidation wave, meaning the ongoing series of mergers and acquisitions among Italy’s various banks, some of which are not friendly. Intesa Sanpaolo has launched a public purchase and exchange offer (OPAS) for Monte dei Paschi, with an extraordinary shareholders’ meeting scheduled for September 10. This dynamic explains much of the rise in Mediobanca and Monte dei Paschi itself, which recently took control of Piazzetta Cuccia.

High Interest Rates Benefit Banks

The interest-rate environment remains the real driver of the sector both in Europe and the United States. The ECB raised the cost of borrowing in June and left it unchanged on July 23, with the deposit rate at 2.25%. High interest rates widen the net interest margin, meaning the difference between the interest banks collect and the interest they pay. At yesterday’s meeting, the Fed indicated that it could follow this path of raising rates in September.

The United States Slows as Technology Declines

Across the Atlantic, the picture is different, with Wall Street under downward pressure in July. The Nasdaq 100 has fallen 8.20% over the past month, the worst performance among the major U.S. indexes. The difference between the U.S. indexes clearly illustrates this sector rotation.

The S&P 500 is down 1.69% for the month, while the Dow Jones has slipped just 1.18%. These indexes are holding up better because they include banks. In Europe, Germany’s DAX is also holding firm, with a gain of 1.32% in July.

Banking ETFs: Europe Pulls Ahead of the United States

The European sector ETF, ticker BNK, has gained 19.80% since the beginning of the year, compared with 8.11% for its U.S. counterpart, KBWB. These are two listed instruments that track baskets of banking stocks—European banks in the first case and U.S. banks in the second. The European basket also includes Italian banks, which have a significant weighting through UniCredit, Intesa Sanpaolo, and Monte dei Paschi.