(Reuters) – The New York Stock Exchange opened higher on Tuesday after a volatile session the day before on fears over the bankruptcy of Silicon Valley Bank (SVB), and as U.S. inflation data showed a slower price growth in February, supporting expectations of a limited rate hike by the Federal Reserve.
In early trading, the Dow Jones index gained 325.68 points, or 1.02%, to 32,144.82 points and the broader Standard & Poor’s 500 rose 1.35% to 3,907.90 points.
The Nasdaq Composite took 1.56%, or 174.47 points, to 11,363.32.
The Consumer Price Index (CPI), released Tuesday by the Labor Department, came in at 0.4% last month and shows a slowdown to 6.0% year on year, in line with estimates economists polled by Reuters.
Friday’s announcement of the closure of the SVB, followed by that of Signature Bank, has also weighed on the markets in recent days, particularly on banking stocks, and investors are hoping that the risk of a financial crisis will force the Reserve federal government to ease its monetary tightening policy.
“In light of the weekend’s events, I don’t think this number could have been more perfect. It shows that inflation is following the trend expected and desired by the Fed,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
According to CME Group’s FedWatch Barometer, markets are still expecting a limited Fed rate hike of 25 basis points next week on Tuesday.
In values, US regional banks rose early in the session on Tuesday after suffering significant losses in recent days.
First Republic Bank gains 57.4% the day after its executive chairman said the regional bank is able to meet cash withdrawal requests thanks to new funding from JPMorgan Chase.
Regional banks Western Alliance Bancorp, Citizens Financial Group, KeyCorp and Comerica Inc, are up 44.3%, 7%, 15.9% and 10%.
Banks JP Morgan, Citigroup and Wells Fargo advance from 0.4% to 5.6% after their sharp decline the day before.
BuzzFeed plunged for its part by 6.6%, the online media group having announced on Monday evening that most of its cash or equivalents are held by the SVB bank.
Meeting planner Cvent, which will be acquired by Blackstone, gained 12.3%.
United Airlines fell 5.7% after Monday released an unexpected loss forecast for the current quarter.
(Written by Diana Mandiá, edited by Blandine Hénault)
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