(C) Common Dreams
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Wall Street rises on relief over banks and inflation. [1]
['Joe Rennison']
Date: 2023-03-14
Wall Street’s worries eased on Tuesday, as investors took comfort from signs that a potential banking crisis appeared contained and bet on a more supportive environment for the economy going forward.
The S&P 500 rose 1.7 percent, lifted by a recovery in some bank stocks and bolstered by gains for heavyweights like Microsoft and Apple, which because of their size have a bigger impact on the performance of the broader index. More than three-quarters of the stocks in the index rose on Tuesday.
It’s common for stocks to bounce after a substantial fall, as investors try to gauge where markets will shake out once a period of stress passes. Nonetheless, the lift in the market was a welcome reprieve for investors who have been battered by a rapidly shifting economic backdrop that has led to whipsaw moves across stock and bond markets.
One dominant narrative taking shape posits that the crisis in the banking sector may lead to a more supportive environment for markets. The fallout from the collapse of Silicon Valley Bank and Signature Bank appears contained, and the episode may also give the Federal Reserve reason to forgo further interest rate increases. Higher interest rates raise costs for companies and were at the root of the stress in the banking sector, so fewer rate increases could help stocks to rebound.
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[1] Url:
https://www.nytimes.com/2023/03/14/business/stock-market-today.html
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