What Happened?

Shares of financial services company Capital One (NYSE: COF) fell 6.6% in the afternoon session after President Donald Trump announced a plan to impose a one-year, 10% cap on credit card interest rates. 

The proposal sent a chill through the banking sector, as the cap is significantly lower than the average commercial bank interest rate, which was just under 21% in the preceding November. Such a move raised concerns about the future profitability of credit card lenders and their ability to extend credit to consumers. Industry groups voiced opposition, claiming the cap could reduce credit availability.

The shares closed the day at $233.22, down 6.4% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Capital One? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Capital One’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 2.9% on the news that investors shrugged off geopolitical tensions in Venezuela to push the S&P 500 and Dow Jones Industrial Average to new all-time highs. 

The rally was spearheaded by a resurgence in the "Magnificent Seven" and artificial intelligence sectors, with Amazon and Micron Technology posting significant gains. Market sentiment was fueled by a dual engine: "AI enthusiasm" approaching a fever pitch and expectations for a "hot" economy in 2026, supported by anticipated rate cuts and fiscal stimulus. This robust environment allowed both high-growth tech stocks and cyclical sectors to advance simultaneously.

Capital One is down 6% since the beginning of the year, and at $233.18 per share, it is trading 9.6% below its 52-week high of $257.94 from January 2026. Investors who bought $1,000 worth of Capital One’s shares 5 years ago would now be looking at an investment worth $2,105.

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