New York stocks gain after banking sector relief

Stock markets in New York ended with significant gains on Tuesday, as smaller banks in particular showed a recovery after earlier concerns about their financial stability. For example, First Republic shares rose 30 percent after investor concerns faded somewhat into the background.

After the bankruptcy of two medium-sized banks in the United States, First Republic lost a lot of value. A new bailout plan for the California bank is reportedly in the works, led by Jamie Dimon, CEO of major bank JPMorgan Chase. It is considering selling parts of the bank if it fails to raise its own capital, sources told Reuters.

At the same time, US Treasury Secretary Janet Yellen said the government was prepared to take more urgent measures to guarantee customer funding. In Europe, investors gained more confidence in the banking sector after Credit Suisse was rescued by its takeover by Swiss bank UBS.

Other U.S. regional banks such as PacWest Bancorp and Western Alliance Bancorp also showed further recovery, rising to nearly 19 percent. Major banks JPMorgan Chase, Bank of America, Citigroup and Wells Fargo gained up to 3 percent.

The Dow Jones Industrial Average rose 1 percent to 32,560.60. The broader S&P 500 gained 1.3 percent to 4,002.87 points, while the technology exchange Nasdaq gained 1.6 percent to 11,860.11 points.

Investors are now mainly looking forward to the US Federal Reserve’s interest rate decision. The central bank will begin its two-day policy meeting on Tuesday and announce the results on Wednesday. Investors hope the central bank will raise interest rates a little less aggressively to keep the financial sector calm.

Tesla also attracted attention. The electric car maker gained nearly 8 percent after ratings agency Moody’s turned more positive about the company’s financial health.

Meta platforms rose more than 2 percent. Morgan Stanley analysts raised investment advice for the parent company of Facebook, WhatsApp and Instagram and expect shares to rise more than 25 percent.

The euro was at $1.0766 against $1.0695 the previous day. U.S. oil prices rose 2.5 percent to $69.33 a barrel. Brent oil was up 2.1 percent at $75.30 a barrel.