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- US stocks jumped as investors await the Fed's monetary policy decision on Wednesday.
- The central bank is expected to hike rates 25 basis points as inflation remains high.
- Bank stocks rallied as Treasury Secretary Janet Yellen said deposit insurance could expand.
US stocks rose on Tuesday as investors prepared for the Fed's next interest rate decision while the bank sector rallied on prospects for more deposit insurance.
Central bankers began their two-day Federal Open Markets Committee meeting and are set to deliver their next policy move on Wednesday afternoon. Markets are pricing in an 83% chance the Fed hikes rates by 25 basis points.
Bank stocks rose after Treasury Secretary Janet Yellen said the government's deposit protection could be expanded. First Republic Bank stock jumped as high as 45%, a day after plunging to a record-low. Meanwhile, the SPDR S&P Regional Banking exchange traded fund surged 5%, its best day since January 2021.
Here's where US indexes stood shortly after the close at 4:00 p.m. on Tuesday:
- S&P 500: 4,002.89, up 1.30%
- Dow Jones Industrial Average: 32,560.60, up 0.98% (316.02 points)
- Nasdaq Composite: 11,860.11, up 1.58%
Here's what else happened today:
- Investors think a systemic credit event is now the number one risk to the stock market, Bank of America said.
- Nouriel Roubini and Jeremy Grantham sounded the alarm for stocks in a new documentary.
- Billionaire investor Nelson Peltz said money flying out of banks was dangerous, and had an idea for the Fed to stop bank runs.
- Meta stock could surge 25% as its TikTok competitor and engagement show improvement, Morgan Stanley said.
- "Big Short" investor Steve Eisman thinks today's banking turmoil is nowhere near close to a repeat of 2008.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil rose 2.75% to $69.50 per barrel. Brent crude, oil's international benchmark, slipped 0.24% to trade at $75.14.
- Gold fell 2.06% to $1,937.70 per ounce.
- The yield on the 10-year Treasury rose 12 basis points to 3.606%.
- Bitcoin ticked higher 1.35% to $28,158.21.