Wall Street's main indexes rebounded, but investors still have worries about the banking sector after US authorities took control of Silicon Valley Bank on Friday.
Silicon Valley Bank (SVB) has caused a global shock when it became the largest bank to close since the 2008 financial crisis. This event caused the US stock indexes to "collapse" in trading session. last weekend.
However, at the opening session of this morning, the futures of the US stock indexes recovered and increased again in the trading session on Monday (March 13).
SVB said it is launching an equity offering to fix a hole in its balance sheet following a $1.8 billion pre-tax loss due to a rush to sell its $21 billion bond portfolio.
After this announcement, the Dow Jones index (US 30) gained 0.94% after "evaporating" 543.54 points, to 32,254.86 points on the night of March 10.
Along with that, the US 500 index also increased 1.28%, to 3,912 points. The US tech 100 index rebounded 1.32% points, closing at 11,984.8 points.
Both the SP 500 and Nasdaq are up year-to-date, with gains of 2.05% and 8.33% respectively, but have fallen more than 3% each in the last week.
SVB Financial shares fell 6% after the regional bank announced plans to issue $1.75 billion of shares. SVB's market capitalization dropped to more than 6 billion USD and followed by other regional banks. Cryptocurrency bank Silvergate saw its share price plunge more than 42% after announcing its closure.
Wall Street's major indexes rebounded, but investors still have worries about the banking sector, after US authorities took control of Silicon Valley Bank on Friday.
This is the largest bank bankruptcy since 2008 in the US, said Sylvia Jablonski, CEO and chief investment officer of investment consulting firm Defiance ETFs. Surely that will panic the market.
In addition, the failure of Silicon Valley Bank is also raising concerns among investors about whether the contagion will spread beyond this bank.
El Nokali expert said that the February jobs report is positive news for the stock market. These figures could reinforce the possibility that the Fed chooses to raise rates by 25 basis points at its policy meeting later this month, as opposed to the 50 basis point increase that had worried investors earlier.
The US stock market has prospered today, but along with that, the worry about the Fed's interest rate policy "shadowing" the market is still extremely interested by investors.