S&P Global and Moody’s downgraded regional lenders with substantial commercial real estate (CRE) exposure, leading to a slump in U.S. banks.

This decision may raise borrowing costs for the banking sector, which is trying to recover from three regional lenders’ failure earlier this year.

The downgrades may raise borrowing costs for banks trying to recover from the Fed’s anchor inflation with higher rates for longer.

S&P also downgraded UMB Financial Corp and Comerica Bank due to increased interest rates and low profitability.

JPMorgan Chase and Bank of America lost over 2%, while Citgroup, Wells Fargo, Goldman Sachs, and Morgan Stanley all fell 1%.

The cost of U.S. bank default insurance has also increased.

S&P Global Market Intelligence revealed Goldman Sachs’ five-year credit default swaps climbed to 78 basis points.