Rising interest rates and a booming economy should, at least in theory, be good for bank stocks. But shares of most of the biggest U.S. lenders are trading in correction territory, some hitting fresh lows for the last year.

Investors who are puzzled by this will look for answers on Friday, when three of the big banks report third-quarter earnings. It is traditionally a weak quarter for banks, but rising rates and worries over trade tariffs are adding pressure to expectations.

As of midday on Thursday, the day after a more than 800-point tumble for the Dow Jones Industrial Average, bank stocks were in the red. Morgan Stanley is nearly 26 percent below its 52-week high, and Goldman Sachs is 22 percent lower, both hitting new 52-week lows on concern over weak trading results and falling fees for giving merger advice.

Shares of Wells Fargo are down 21 percent from their recent high, also near a 52-week low. Citigroup shares are down 13.5 percent, and J.P. Morgan Chase's are down 7.6 percent.

Wells Fargo, Citi and J.P. Morgan report results on Friday. Morgan Stanley and Goldman are out next week.

A stock is said to be in correction territory when it falls 10 percent or more and a bear market when it drops more than 20 percent.