American Express (AXP) shares fell sharply by 5.41% in post-market trading, as investors reacted to President Donald Trump's surprise proposal to cap credit-card interest rates at 10%.
The proposal, announced via social media, could significantly impact credit-card companies' profitability. Analysts estimate that AXP's net interest margin could drop from 9.2% to 5.7% if the cap is implemented. While the proposal is seen as unlikely to pass due to lack of congressional support, the uncertainty has weighed heavily on AXP's stock.
Jefferies analyst John Hecht noted that such a cap could lead to tighter lending standards and weaker retail sales, further dampening investor sentiment toward financial-sector stocks like AXP.
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