Stock market shares rebounded more than 300 points higher Tuesday following the fallout of Silicon Valley Bank’s failure late last week, which Signature Bank followed.
The Dow Jones Industrial Average climbed 336.26 points to 32,155.40, CNBC reported, breaking five days of consecutive losses.
Meanwhile, the S&P 500 gained 1.65%, amounting to 3,919.29 at the close. The Nasdaq Composite closed at 11,428.15 after gaining 2.14%.
Investors’ enthusiasm for buying bank stocks appeared to wane slightly by the afternoon. However, some bank stocks experienced gains, which CNBC attributed to investors’ rising confidence that other banks would not repeat what happened at Silicon Valley and Signature banks.
Regulators Sunday announced a plan to backstop depositors to alleviate fears about the banking system amid the collapse of Silicon Valley Bank and Signature Bank.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” Janet Yellen, treasury secretary, Jerome Powell, Federal Reserve chair, and Martin Gruenberg, FDIC chair, said in a joint statement.
The Treasury Department tapped more than $25 billion from its Exchange Stabilization Fund to create a backstop.
Meanwhile, the Federal Reserve offered loans to various banks, credit unions, and similar financial institutions.
“This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy,” the Federal Reserve said in a Sunday statement. “The Federal Reserve is prepared to address any liquidity pressures that may arise.”
President Joe Biden said Sunday that he was happy with the steps taken but cautioned that people responsible for the bank failures would face consequences.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” Biden said via CNBC.
