The S&P 500 and the Dow Jones Industrial Average registered their largest one-day percentage declines in a month on Tuesday, as political turmoil in Italy sparked concerns about the stability of the euro zone and bank shares fell out of bed.

Italy has been unable to assemble a coalition government since inconclusive elections in March, which saw the rise of anti-establishment parties that support leaving the euro. The most recent nominee for prime minister failed to secure support from the country’s major political parties.

The political crisis in Rome, and the threat to the euro project it represents, triggered a rush to traditional safe havens like U.S. debt, pulling down the 10-year Treasury yields and in turn spurring losses for banks.

Shares of S&P 500 banks registered their largest one-day decline in more than two months, ending more than 4 percent lower.

Shares of the large banks were also pressured by downbeat guidance from JPMorgan Chase and Morgan Stanley. JPMorgan indicated that the bank’s second-quarter markets revenue would be flat compared with a year earlier. The co-head of Morgan Stanley’s wealth management division said activity had slowed since March, according to a CNBC report.

JPMorgan Chase shares, which fell 4.3 percent, were the worst drag on the S&P 500. Morgan Stanley fell 5.8 percent, the second-largest percentage decline on the index.

Shares of energy companies were also led lower by a drop in domestic crude oil futures on expectations that Saudi Arabia and Russia could pump more crude to compensate for a potential supply shortfall.

Approximately 7.58 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.58 billion share  average over the past 20 trading days.

Consumer Confidence Rises

Consumer confidence gained ground during May, but households were a bit pessimistic about their short-term income prospects even as they expected strong job growth to persist, which could restrain consumer spending.

The Conference Board reported on Tuesday that its consumer confidence index rose 2.4 points to a reading of 128.0 this month from a downwardly revised 125.6 in April. The index was previously reported at 128.7 in April.

The Conference Board’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, increased to 26.6 in May, the best reading since May 2001, from 22.7 in April.

That measure, which closely correlates to the unemployment rate in the Labor Department’s employment report, suggests that labor market slack continues to shrink.

However, consumers were less confident about their short-term income prospects. Only 21.3 percent of consumers expected their income to rise this month from 21.8 percent in April. The proportion expecting a decrease rose to 8.2 percent in May from 7.9 percent in the prior month.

The weak income readings are despite massive tax cuts which the Trump administration claimed would boost paychecks for American workers. The $1.5 trillion tax cut package came into effect in January.

Consumers also showed a reluctance to commit to purchases of big-ticket items i.e., automobiles, houses and appliances. Consumer spending declined during in the first quarter, although there are signs that it picked up early in the April-June period.

Home Prices Rise Again

The S&P CoreLogic Case-Shiller composite index of home prices in 20 metropolitan areas increased 0.5 percent in March after rising 0.8 percent in February. House prices gained 6.8 percent in the 12 months to March after rising by the same margin in February.

The solid gains are at odds with recent data which had suggested a cooling in house prices. The Federal Housing Finance Agency reported last week that house prices edged up 0.1 percent in March from February.

The regulator’s index is calculated by using purchase prices of houses financed with mortgages sold to or guaranteed by mortgage finance companies Fannie Mae or Freddie Mac.

The house price inflation is being fueled by an acute shortage of homes available for sale, which is hurting the housing market.