Technology Sector Contributes to Nasdaq Composite Surge
The technology sector also played a role in Wall Street's gains, pushing the Nasdaq Composite to its strongest performance since February 2, 2022. The sector's growth helped offset fears of a banking crisis and a dampened investor sentiment caused by the European Central Bank's rate hike.
European Central Bank Raises Key Policy Rate
The European Central Bank raised its key policy rate by 50 basis points, initially dampening investor sentiment. However, major financial institutions' subsequent support for First Republic Bank helped counteract this negative impact.
Lenders Support First Republic Bank with a $30 Billion Deposit
JP Morgan Chase & Co and Morgan Stanley confirmed they would deposit up to $30 billion into First Republic Bank's coffers, stabilizing the embattled lender. This move increased share prices for these major banks and First Republic Bank, with positive sentiment spreading to other regional lenders.
U.S. Banking System Sound, Unemployment Claims Drop
U.S. Treasury Secretary Janet Yellen reassured Americans that the banking system remains sound and that deposits will be available when needed. Additionally, data showed a significant drop in new claims for unemployment benefits, indicating a continued strong labor market.
Meta and Snap Shares Rise as TikTok Ban Looms
Meta Platforms and Snap Inc shares climbed after the U.S. administration threatened to ban rival TikTok. This development contributed to a favorable market environment, with advancing issues outnumbering declining ones on the NYSE and Nasdaq.
