Wall St: Investors may take shelter in US regional banks as Fed hikes loom

Treasury yields have risen in anticipation of tighter policy, with those on the benchmark 10-year Treasury up 40 basis points from recent lows.

Expectations of rising interest rates are bolstering the shares of regional banks, as a tumble in technology stocks pushes investors to search for assets that could thrive amid higher yields and tighter Federal Reserve policy.

The SPDR S&P Regional Banking ETF was up 2% year-to-date on Friday afternoon, compared to a 6.6% decline for the S&P 500. Gains in some individual bank stocks have been even more eye-catching: Shares of Citizens Financial Group Inc are up 8.4% for the year to date, while shares of KeyCorp are up nearly 9%.

Regional banks make a hefty chunk of their revenues from net interest