Market Snapshot: U.S. stock futures rise as bank tensions ease and traders eye Fed

by | Mar 21, 2023 | Stock Market

U.S. stock futures early Tuesday extended gains for the week as anxiety about the banking sector eased and traders eyed the looming Federal Reserve interest rate decision.How are stock-index futures trading
S&P 500 futures
rose 33 points, or 0.8% to 4,016

Dow Jones Industrial Average futures
added 287 points, or 0.8% to 32,743

Nasdaq 100 futures
climbed 79 points, or 0.6% to 12,767

On Monday, the Dow Jones Industrial Average
rose 383 points, or 1.2%, to 32245, the S&P 500
increased 35 points, or 0.89%, to 3952, and the Nasdaq Composite
gained 45 points, or 0.39%, to 11676.

What’s driving markets Calmer conditions in the financial sector was helping support sentiment on Tuesday. Investors have welcomed the market’s ability to absorb the rescue takeover of Credit Suisse
by UBS
whose shares rose over 3% in Europe early Tuesday. The shotgun-wedding of a failing systemically important bank and its peer intially rattled stocks at the start of the week. But the S&P 500 index finished Monday up 0.9% as many recently battered banking shares rallied in the U.S. and Europe. A statement from the ECB early Monday effectively promised that it would take a different approach from the Swiss National Bank with respect to higher risk bonds in banks’ capital structure than the Swiss National Bank did in forcing the merger of Credit Suisse with UBS
on Sunday. Reports that the U.S. Treasury is considering boosting the guarantees on bank deposits was also helping the mood. Treasury Secretary Janet Yellen on Tuesday told the banking industry “the situation is stabilizing.” Easing tensions in the financial sector makes it more likely the Federal Reserve will raise its policy interest rate again on Wednesday, said analysts. Read: The Fed will either pause or hike interest rates by 25 basis points. What are the pros and cons of each approach? “[T]he more positive shift in sentiment saw investors put growing weight on the probability of the Fed hiking rates tomorrow,” said Jim Reid, strategist at Deutsche Bank. “Our own U.S. economists published their preview of tomorrow’s Fed meeting, and they agree with the view that the Fed will opt for 25bps [basis points]. Our economists expect the Fed to follow the ECB’s lead and raise rates in line with expectations, do away with forward guidance, but signal a continued tightening bias,” Reid added. U.S. economic updates set for release on Tuesday include existing home sales for February, due at 10 a.m.. And: The bank panic of 2023 could be just what the stock market needs to make money for investors againCompanies in focus
First Republic Bank
  shares were up more than 23% in premarket trading Tuesday. The regional bank’s stock is up after reports that JP Morgan Chase & Co. is reportedly helping the bank determine strategic next steps like a sale or capital raise. Inc.
shares are up less than 1% in the premarket. The online retail giant is cutting another 9,000 jobs, according to a company announcement. That follows more than 18,000 recent Amazon layoffs. “This was a difficult decision, but one that we think is best for the company long term,” CEO Andy Jassy wrote in a memo.

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