The Lack of Rebound in Banks

I understand people being bullish and I understand people being bearish

What I’m having a hard time understanding is the overwhelmingly bearish sentiment in banking and the highly bullish sentiment in tech. Several companies on the Nasdaq are at or near ATHs and the Nasdaq is famously up on the year. All the while the banking sector of the S&P is down 38% YTD. And it’s not a wide disbursement between them where the best are recovering. Most banks are still very much beaten down from their 52 week highs. They are widely underperforming the broad S&P by almost 30% year to date.

So this got me to thinking, how does this scenario play out? The banks put up reserves in 1Q in order to reserve for adverse loan performance expected in 2Q. Based on market reaction, I can only think people believe that actual performance will be worse than expected (since banks like JPM were able to still have positive earnings in 1Q even after shaving off a significant portion for reserves).

So what scenario exists where defaults absolutely swamp the banks to the degree that they are throwing off significant losses and revenues of all these tech companies is fine? I view the banks as a pretty integral part of the economy’s health. If you have massive loan defaults, how is this not going to impact the entire economy?

TLDR; Been looking at leaps on banks, someone talk me out of it