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| US Stocks Rise as Investors Look to Federal Reserve Decision and Shake Off Banking Concerns |
Investors are turning their attention to the Federal Reserve's upcoming interest rate decision, resulting in a rise in U.S. stocks. The Dow Jones Industrial Average climbed by 286 points or 0.9%, the S&P 500 rose by 1%, and the NASDAQ Composite increased by 0.9%. The increase comes after investor fears about the banking system were alleviated following the weekend rescue of Credit Suisse. While the likelihood of the Fed raising rates by a quarter of a percentage point is now over 80%, it is less than what was expected two weeks ago. The move towards taming inflation is likely to continue, however.
Treasury Secretary Janet Yellen is expected to speak to the American Bankers Association, where she will stress the importance of maintaining a stable banking system. According to prepared remarks, regulators will take the necessary steps to keep deposits and the system safe. If smaller institutions face deposit runs that threaten contagion in the system, regulators could take further action. Despite recent volatility, Yellen notes that the U.S. banking system remains sound.
Shares in First Republic Bank have rebounded by 24% after tumbling on Monday following news that big banks were working on a possible capital infusion. Shares in PacWest Bancorp and Western Alliance Bancorporation have also increased by 11% and 11.5%, respectively. Meanwhile, economic data for February's existing home sales is expected to be released, and crude oil and Brent oil futures have both risen, while gold futures have decreased.
Overall, while concerns about the banking system persist, investors appear to be more focused on the Federal Reserve's interest rate decision and its implications for the future of the U.S. economy.
