The New York Stock Exchange ended higher on Tuesday thanks to purchases of shares at a good price, in a market less worried than Monday because of the turmoil in the banking sector.
The stock market is being driven by expectations of the first goal to tighten monetary policy by the Federal Reserve (the Fed, the central bank).
The Dow Jones gained 1.06%, the tech-heavy Nasdaq 2.14% and the broad S&P 500 index 1.68%.
This Tuesday “has been a paradigm shift, at least in the short term, in relation to the vulnerability of the banking system,” said Steve Sosnick, of Interactive Brokers.
Traders “the risk of banking contagion has disappeared and Wall Street’s appetite for risky assets has returned,” Oanda Edward Moya said in a note.
“So we had to bounce back, fueling the fear of something missing,” Sosnick reflected briefly.
On Monday, medium-sized and regional banks soared in the stock market, led by First Republic, which rebounded 26.98% on Tuesday after falling nearly 62% on Monday.
Others, like KeyCorp (+18.54%), have acquired the parent bank of Cleveland (Ohio) KeyBank; Bank of Phoenix (Arizona) Western Union (+14.36%) or Californian Pac West (+33.85%).
Large banks also grew, for example Wells Fargo (+4.58%) or Citigroup (+5.95%).
The return of some calm to Wall Street caused the sale of bonds, which raised rates, which are the interest or interest borrowed by the Treasury.
The 10-year bond thus went on to yield 3.68% compared to 3.57% on Monday.
The earthquake in the banking sector has many traders thinking H will step in with interest rate hikes to contain inflation at its meeting next week.
The data on US inflation, which in February rose to 0.4% in one month and 6% in 12 months, also leads traders to think that H pressure will weaken.
The announcement of an additional cut of 10,000 jobs at Meta also encouraged the index with a 7.25% increase in the price of the parent company of social networks Facebook and Instagram. In total, Meta will lay off 21,000 people at the end of the restoration, or 24% of its workforce.
The entire tech sector rose from the speculation rate, from microchip maker AMD (+6.63%) to Intel (+3.93%) to Google parent Alphabet (+2.83%).
