The financials sector bucked a broad-based but mild fall in US stocks on Tuesday as the shares of US banks jumped.

It was another strong day for US lenders on Tuesday, with the S&P 500 banks index climbing 1.3 per cent. The move pushed the industry group’s gains for August to almost 7 per cent as it cemented its place as the top performer this month on the S&P 500 index.

The rise has come as top Federal Reserve officials have hinted that the central bank may add to its December 2015 rate increase as early as September. Higher rates would offer a reprieve for lenders that have had their net interest margins, or the difference in the rates they charge on loans and their own funding costs, compressed.

Inversely, the utilities sector struggled on Tuesday, sliding 1 per cent and bringing the fall so far this month to 6.4 per cent.

Utilities groups have been among the top performing stocks this year as investors have sought out the fat dividend streams they provide as global bond yields have plumbed new lows. But with the odds of a rate rise this year having climbed markedly, investors have begun rotating away for the sector.

Elsewhere, the US dollar climbed by 0.5 per cent against six major developed-market currencies, while the JPMorgan emerging market currency index, which tracks EM currencies against the greenback, was down by 0.4 per cent.

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