Wall Street’s major indexes rose Thursday as major interest rate-sensitive tech and growth stocks surged after the Federal Reserve suggested it was close to halting rate of interest hikes amid turmoil in the banking sector.
The Dow Jones Industrial Average rose 443 points, or 1.4%, to 32,473, the Nasdaq up 2.3% and the S&P 500 up 1.6%.
On Wednesday, the central bank raised interest rates by the expected 25 basis points, but not stated in its policy statement that “ongoing hikes” are likely to be appropriate, indicating a marked shift in its stance.
The Fed’s softer tone has brought relief to markets which were fearful a couple of liquidity crisis in the banking sector since the bankruptcy of two regional lenders earlier this month.
Wall Street’s major indexes closed sharply lower on Wednesday after Fed Chairman Jerome Powell said the central bank was still aiming to fight inflation, whilst he indicated that credit woes due to banking problems could have “significant” implications for the economy.
![Traders work on the floor of the New York Stock Exchange on Thursday.](https://nypost.com/wp-content/uploads/sites/2/2023/03/NYPICHPDPICT000008663398.jpg?w=1024)
“The markets are hoping you are likely to get one other rate hike,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
“I imagine the hopes (of an rate of interest cut) are dashed. You don’t need things to get so bad that you just need an rate of interest cut.”
According to CME Group’s Fedwatch tool, investors’ bets are almost evenly split between the Fed holding off on rate hikes in May and one other hike of 25 basis points.
As US Treasury yields fell on rising hopes for an end to the Fed’s tightening cycle, Apple, Microsoft and Amazon jumped between 0.9% and 1.6%.
Bank of America and UBS expect the Fed funds rate goal to peak in May at 5-5.25%, compared to earlier forecasts of 5.25-5.5%.
Troubled regional lender First Republic Bank jumped 4.6% after falling Wednesday following Treasury Secretary Janet Yellen’s remark that there was no discussion of insuring all bank deposits.
PacWest Bancorp and Western Alliance Bancorp gained 2.7% and seven.1% respectively.
Meanwhile, data showed latest jobless claims fell to 191,000 last week from the week before, defying expectations that the figure would rise to 197,000.
Block shares fell 20% after Hindenburg Research said it was taking short positions in a payments firm led by Jack Dorsey.
Nvidia, amongst others, jumped 3.0% after Needham raised the chipmaker’s price goal, possibly making the most of the power of information centers in the near future.
Coinbase Global fell 16% after the Securities and Exchange Commission threatened to sue the crypto exchange over a few of its products.
Accenture rose 3.8% after the company said it could cut around 2.5% of its workforce.