One of Wall Street's favorite Trump trades is rewarding investors that bet against it

The biggest beneficiaries of the so-called Trump rally are reversing the gains they made after the election.

Last week, traders increased their bets against banking stocks as uncertainty mounted over the future of the American Health Care Act. According to S3, a financial analytics firm, short sellers in the top ten bank stocks last week gained 6.35% net of financing and mark to market.

GOP leadership eventually pulled its bill to replace Obamacare on Friday as party divisions meant the House would not have had a majority vote.

Financial stocks on the S&P 500 jumped 26% after the election, and were the poster child for Wall Street's biggest bets on the new administration.

Trump's agenda includes rolling back some post-crisis regulations and corporate tax reform, both of which make the sector more attractive. Also, if many of the pro-growth promises are kept, the Federal Reserve would probably raise interest rates in step with rising inflation, and that would earn banks more for lending.

But financials topped out on March 1, and traders who sought to profit from a reversal of the uptrend profited are starting to count some gains.

Short interest should increase if the sector's losses continue, said Ihor Dusaniwsky, the head of research at S3 Partners, in a note. The three stocks with the highest short interest last week were JP Morgan, Bank of America, and Wells Fargo.

Financials led losses in early trading on Monday with a 2% decline.