The U.S. banking industry continues to face challenges such as higher deposit costs, the risk of a potential default on commercial real estate (CRE) loans, and rating downgrades by top rating agencies.

Given the challenges plaguing the U.S. banking sector, waiting for a better entry point in JPMorgan Chase & Co. (JPM) could be wise. However, given its fundamental weakness, U.S. Bancorp (USB) is best avoided now.

When the banking sector was recovering from the crisis caused by the failure of the three regional banks earlier this year, major credit rating agencies recently downgraded several banks due to worries over the stability of the U.S. banking sector. Moody’s downgraded 10 small and mid-sized banks and placed six banking giants, including USB, on review for potential rating downgrades.

Previously, Fitch downgraded the entire U.S. banking sector and has recently warned of potential rating downgrade for America’s biggest banks. S&P Global has recently downgraded five U.S. banks… 

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