Markets Gain as Bank Concerns Ease

U.S. equities advanced as moves to prop up struggling banks boosted optimism about the sector. The gains also came ahead of this week’s Federal Reserve decision on interest rates amid some speculation that policymakers might not raise borrowing costs because of the banking turmoil. 

Bank stocks helped drive the gains. Shares of regional banks Fifth Third Bancorp (FITB), Lincoln National Corporation (LNC), and U.S. Bancorp (USB) rose. New York Community Bancorp (NYCB) shares skyrocketed after the bank bought up much of the assets of collapsed Signature Bank. UBS Group (UBS) purchased troubled Swiss rival Credit Suisse Group (CS), and its shares gained. However, American Depositary Receipts (ADRs) of Credit Suisse plunged 53%. Shares of big banks gave back early gains, although shares of Goldman Sachs (GS) and JPMorgan Chase (JPM) were still in positive territory.

Almost all of the stocks in the Dow were in the green, led higher by shares of Honeywell (HON), Dow (DOW), and Caterpillar (CAT). NRG Energy (NRG) was the best-performing stock in the S&P 500 on an upgrade from Bank of America. Fleetcor Technologies (FLT) shares jumped as the payments provider struck a deal with activist investor D.E. Shaw Group to reshuffle the company’s board and consider splitting up the business. 

AI Concerns

Amazon (AMZN) shares declined after CEO Andy Jassy announced the online retailer was cutting 9,000 more jobs. It was another tough day for investors of First Republic Bank (FRC), with shares sinking after S&P Global downgraded its bond rating for the second time in four days. Shares of companies involved with artificial intelligence (AI), including Intel (INTC), Advanced Micro Devices (AMD), and Microsoft (MSFT), declined after Sam Altman, CEO of ChatGPT creator OpenAI, warned about the potential risks of the technology. 

The yield on the 10-year Treasury note climbed. Oil futures reversed earlier losses and gained 1%. Gold futures rose. The U.S. dollar fell against the euro, pound, and yen. Major cryptocurrencies traded lower.