At 10:28 ET (14:28 GMT), the Dow Jones Industrial Average increased by 0.6%, or 203 points, as investors shifted their attention to the Federal Reserve’s future decision on interest rates scheduled for Wednesday afternoon. The S&P 500 and the NASDAQ Composite also rose by 0.7% and 0.6%, respectively. After the recent rescue of Credit Suisse (SIX:CSGN), concerns about the banking system’s state eased, soothing investor nerves. Futures traders believe there is an 80% chance that the Fed will increase rates by 0.25%, less than what was anticipated two weeks ago but more than a pause, as the Fed continues its efforts to control inflation.
This morning in Washington, Treasury Secretary Janet Yellen addressed the American Bankers Association, saying that financial regulators are determined to take the necessary measures to maintain deposits and ensure the system’s safety, as they did with Signature Bank and Silicon Valley Bank. According to Yellen, if other smaller institutions experience deposit runs that threaten contagion in the system, regulators could take further action. “The situation is stabilizing. And the U.S. banking system remains sound,” her prepared remarks stated.
Shares of First Republic Bank (NYSE:FRC) surged by 30% after dropping on Monday following news that big banks are considering a potential capital infusion. Shares of PacWest Bancorp (NASDAQ:PACW) climbed by 14%, and stocks of Western Alliance Bancorporation (NYSE:WAL) rose by 10%.
In economic news, February’s existing home sales reading showed a 14.5% month-over-month increase, with annual sales of 4.58 million, both higher than anticipated. Oil prices rose, with Crude Oil WTI Futures up by 1.4% to $68.77 a barrel and Brent Oil Futures up by 1.2% to $74.66 a barrel. Gold Futures decreased by 1.3% to $1,957.
