Big rally on Wall Street – The banking crisis has taken a break

On Tuesday, the leading stock indexes opened on Wall Street, optimism lingered all evening and gradually caught fire in the rush:

• The industrial-heavy Dow Jones index closed up 0.98 percent.
• The S&P 500 broad composite index rose 1.31 percent.
• The Nasdaq Technology Index closed up 1.58 percent.

Yesterday ended with a nice rally for the stock market in the US, but with a sharp drop for the US First Republic Bank, where the share price almost halved during the trading day. This came several days after the bank’s Urus.

On Tuesday, shares in First Republic Bank rose nearly 30 percent, and banking stocks in general also got a nice boost for the second day in a row. In the past couple of days, particular focus has been on smaller banks and regional banks, and these banks had a good day in the stock market on Tuesday after Finance Secretary Janet Yellen increased her support for these type of banks, if needed.

Tesla rose about eight percent after receiving an updated credit rating from Moody’s, according to reports CNBC. The company is now awarded a Baa3 rating.

The price of oil rose slightly on Tuesday evening to more than $75 a barrel of North Sea oil.

Interest rate rush

Investors are eagerly awaiting another interest rate decision from the US Central Bank on Wednesday.

Barely two weeks ago, the market priced in two rate hikes, after Central Bank Governor Powell stated at a hearing on Capitol Hill that peak interest rates may be higher than expected.

Since the banking crisis occurred, the market has broken expectations. Soon after the bank collapse, many people doubt whether there will be an increase in interest rates at the Wednesday meeting. During yesterday interest rate expectations rebounded and now the market is pricing in the 70% possibility that the Fed will raise interest rates.

Banking crisis

Fears of the collapse of the Silicon Valley bank, which has been placed in receivership, quickly spread to many banks last week. Both US banks Silicon Valley Bank and Signature Bank closed their doors permanently within one week.

Over the weekend, the major Swiss bank was acquired by rival UBS for $3.25 billion. Then it also became clear Credit Suisse’s bondholders would lose around NOK 185 billion after selling the scandal-hit bank to rival UBS on Sunday.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For more terms see here.