Stocks closed higher for a second straight day as anxiety eased ahead of tomorrow's key Fed decision.
Turmoil in the financial sector has sparked volatile price swings in bank stocks in recent weeks, but a lack of jarring headlines today helped calm investors' nerves. Some bargain hunting also buoyed the broader market, with financial and energy – two of the most beaten-down sectors of late – seeing notable upside on Tuesday.
Lifting the financial sector were words from Treasury Secretary Janet Yellen, who said in prepared remarks for a speech to the American Bankers Association that the government is prepared to "to protect the broader U.S. banking system" from "the risk of contagion." First National Bank (FRC) was among the biggest movers today, surging 29.6%. Still, shares of the regional lender are roughly 90% lower than where they closed last Tuesday.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
PacWest (PACW, +18.8%) and Western Alliance Bancorp (WAL, +15.0%) were two other bank stocks that enjoyed big gains.
Energy was another outperforming sector, rising 3.5% as U.S. crude futures climbed 1.2% to $68.48 per barrel – their highest close in a week. Signs of stabilization in the banking industry is helping lower expectations of a recession, which in turn is boosting the oil market. APA (APA, +6.6%), Devon Energy (DVN, +4.4%) and Marathon Oil (MRO, +5.6%) were some of the best energy stocks today.
Still, the bulk of Wall Street's attention remains focused on the Federal Reserve; specifically, how big of a rate hike – if any – will the central bank announce tomorrow. The Fed meeting kicked off today, and has become even more anticipated over the past two weeks following the failures of Silicon Valley Bank and Signature Bank. Chances for a 50 basis point (0.50%) rate hike quickly went out the window after the bank closures, with Fed funds futures currently pricing in an 86.4% probability of a 0.25% rate increase, according to CME Group.
"Just as rising interest rates were part of the recipe that led to SVB's collapse, interest rates will be impacted in turn again in the aftermath of the collapse," says Shyam Pradheep, general manager at financial education app Zogo. "While we don't know which way the Fed will go yet, many will be looking at whether there is a shift in the balance between wrestling inflation to the ground, meaning further rate hikes, and keeping the economy from tumbling into a recession with flat or lower rate hikes in the future."
Ahead of tomorrow's highly anticipated event, the Nasdaq Composite rose 1.6% to 11,860, the S&P 500 added 1.3% to 4,002, and the Dow Jones Industrial Average gained 1.0% to 32,560.
AI's top stock picks
The recent volatility in the stock market isn't for faint-of-heart investors, but it can be an exciting environment for stock pickers. While not everyone has access to the same insights and data that deep-pocketed investors or hedge funds have, investors can still track their top stock picks as one potential way to identify the best stocks to buy.
Another approach leverages artificial intelligence (AI). Danelfin is an analytics platform that uses AI to analyze hundreds of fundamental, technical and sentiment data points per day for 1,000 U.S.-listed shares and 600 European-listed firms. Danelfin's algorithms then generate stock picks that it views as highly likely to outperform the market over the next 30 to 90 sessions.
So, what does Danelfin say investors should be buying now? Read on as we take a look at the platform's latest high-scoring stocks.
-
Why Uber Stock Is Volatile After GM's Cruise AnnouncementUber stock is swinging this week following news that General Motors is restructuring its Cruise unit. Here's what you need to know.
-
UnitedHealth Stock Falls as Lawmakers Eye Insurers, PBMsUnitedHealth stock is continuing to fall Thursday after the introduction of bipartisan legislation targeting PBMs and healthcare giants. Here's what to know.
-
CPI Report Casts Doubt on Rate Cuts in 2025: What the Experts Are Saying About InflationCPI November Consumer Price Index data sealed the deal for a December rate cut, but the outlook for next year is less certain.
-
Rebound in Jobs Growth Keeps Fed on Track: What the Experts Are SayingJobs Report No nasty surprises in the November payrolls data leaves a quarter-point cut in play.
-
October CPI Report Hits the Mark: What the Experts Are Saying About Inflation
CPI While the current pace of rising prices appears to have leveled off, the expected path of rate cuts has become less certain.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Market Reaction to Election Results: What the Experts Are SayingJobs Report Election uncertainty has been removed from the list of investors' worries, helping equities soar.
-
Jobs Growth Stalls Amid Hurricanes and Strikes: What the Experts Are SayingJobs Report A dismal October payrolls print supports the case for a slow and steady pace of rate cuts.
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have TodayGoogle parent Alphabet has been a market-beating machine for ages.
