Wall Street on the rise, reassured by inflation and on the banks

by Stephen Culp

NEW YORK (Reuters) – The New York Stock Exchange ended sharply higher on Tuesday after the release of inflation data in line with expectations and as worries about the banking sector faded, providing reassurance on the size of the next Federal Reserve (Fed) rate hike.

The Dow Jones Industrial Average gained 1.06%, or 336.26 points, to 32,155.40 points.

The broader S&P-500 gained 64.80 points, or 1.68%, to 3,920.56 points.

The Nasdaq Composite advanced for its part by 239.31 points (2.14%) to 11,428.15 points.

The main indices of Wall Street thus marked a rebound after the tremors caused by the implosion of Silicon Valley Bank and Signature Bank, raising fears of a domino effect in the banking sector.

The financial sector erased some of its losses, as the S&P-500 banking index recovered from its worst daily decline since June 2020.

All the major sectors of the S&P-500 ended the session in the green, first and foremost communication services.

The lull comes after reassuring comments from US President Joe Biden and other policymakers, who promised to contain the crisis.

“The market has an opportunity to digest some of the information from the past two days,” commented Matthew Keator, director of Keator Group, a Massachusetts-based management firm.

He added that investors are “seeing coordinated efforts from multiple government agencies” and feel that “things have calmed down a bit on their own.”

Data released today by the US Department of Labor showed that consumer price inflation slowed in February, as expected, although inflation remained well above the US central bank’s 2% target.

Signs of economic weakness, coupled with fears surrounding the banking sector, however, have given renewed weight to the hypothesis that the Fed will raise interest rates by 25 basis points, and not by 50 basis points as feared earlier this month, when it met on March 21-22.

On the value side, Meta Platforms jumped 7.3% in the wake of the announcement of a new layoff plan targeting 10,000 jobs.

Uber Technologies rose 5.0% after a California state court upheld that ride-hailing companies can consider local drivers to be self-employed and not employees. Lyft saw a more modest gain, of 0.6%.

United Airlines Holdings declined 5.4% after announcing that it expected an unexpected loss in the current quarter.

(French version Jean Terzian)