Banks, and financials in general, play an important role in the performance of stock indices. Many bull markets are characterized by the outperformance of banks relative to the overall market. The latest rally in the S&P has not been confirmed by the relative outperformance of the banks. In the chart below we use the KBW Index as a proxy for bank performance. If you are unfamiliar with the KBW Index, it is a float adjusted modified, market-cap index of the 24 largest banks in the US.