NEW YORK, March 21 (Reuters) – Wall Street closed sharply higher on Tuesday as widespread fears over liquidity in the banking sector abated and market participants eyed the Federal Reserve, which is expected to conclude its two-day policy meeting on Wednesday with a 25 basis-point hike to its policy rate.
All three major U.S. stock indexes were bright green as the session closed, with energy (.SPNY) consumer discretionary (.SPLRCD) and financials (.SPSY) enjoying the most sizable gains.
A one-two punch of regional bank failures last week, followed by the rescue of First Republic Bank (FRC.N) and the takeover of Credit Suisse , sparked a rout in banking stocks and fueled worries of contagion in the financial sector which, in turn, heightened global anxieties over the growing possibility of recession. But banking stocks (.SPXBK) bounced back on Tuesday, building on Monday’s reversal.
Stocks rose on Tuesday as traders became optimistic on the financial sector’s outlook following Janet Yellen’s reassurances to safeguard against further banking crises.
The Dow gained 0.98%.
The S&P 500 rose 1.30%.
The Nasdaq surged 1.58%. https://t.co/T8nx15qTRh pic.twitter.com/jSASHeB6DX— CNBC (@CNBC) March 21, 2023
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