Regional bank stocks, as measured by the KRE ETF, fell over 2% after the Federal Reserve announced its first interest rate hike since 2023. The 25-basis-point increase is a response to persistent inflation. Higher interest rates can negatively impact regional banks by increasing their funding costs and potentially slowing loan growth. Further pressuring the sector, Huntington Bancshares (HBAN) lowered its earnings guidance, citing challenges from higher short-term rates and competition for deposits.