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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
-
How to Add Your Driver’s License or State ID to Google WalletStore and use your digital ID securely on your Android device for TSA, age verification and more.
-
I Retired at 60 Two Years Ago With $3.1 Million. My 62-Year-Old Wife Still Works Because She Wants to, but She Resents My Free Time. Help!We asked a psychologist and a mediation expert for advice.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. did about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Government Shutdown to Delay Data, Including Key Jobs ReportWhile government shutdowns typically don't impact stock returns, they can delay the release of key economic data – including the monthly jobs report.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
