When interest rates fall, that means the interest rates on new loans also fall. For many banks, lower interest rates directly reduce profits. Many stock sectors tend to benefit from decreasing interest rates, which allow them to cheaply borrow the cash needed to expand their business. The financial sector, as the lender on the other side of those low rates, might not share in these benefits. Remember, these are just general rules of thumb that can guide expectations; banks can still be profitable during low-rate environments, and banking stocks don't always underperform in those times, either.