On Thursday, the Dow Jones Industrial Average rose by 1.2%, or 371 points, while the S&P 500 and Nasdaq Composite gained 1.8% and 2.5% respectively. This was due to reports that major Wall Street banks, including Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Citigroup, were stepping in to rescue First Republic Bank, which had been downgraded to junk status.
As a result, First Republic Bank’s stock price surged by 10%, and the broader financial sector increased by over 2%. In addition, Credit Suisse borrowed up to $54 billion from the Swiss National Bank to improve its liquidity after its largest shareholder, Saudi National Bank, withdrew its funding.
The relative calm in the banking industry following several days of turmoil has boosted investor confidence in the Federal Reserve’s plans to increase interest rates next week. The odds of the Fed raising rates by 0.25% on March 22nd have risen to 80% from under 50%.
Despite the surge in Treasury yields, tech stocks remained resilient, with Alphabet and Adobe Systems Incorporated rising by over 4% and 5% respectively. In earnings news, UiPath Inc reported better-than-expected fourth-quarter results, beating Wall Street expectations on both the top and bottom lines, and lifting its 2024 guidance.
RBC lifted its price target on the stock to $17 from $15, citing the momentum of its core business and the potential of generative AI and ChatGPT integration.
