US OPEN: Bank stocks rebound propels Wall Street

• Wall Street up sharply at start of session

• CPI reading does not surprise

• Local bank stocks rebound dynamically after yesterday's declines

Tuesday's session on US markets saw a marked improvement in investor sentiment, as investors eagerly began to buy shares in the face of reassurances from regulators about the stability and solvency of local banks. The CPI inflation reading did not surprise the market and came in line with expectations, but the underlying monthly reading came in at +0.5% against expectations of +0.4%. The Federal Reserve has the tough task of deciding how much to tighten monetary policy in the face of systemic uncertainty. 

Unrest in the banking sector has turned the market's expectations of rate rises 180 degrees. The money market is now pricing in an 80% probability that the FOMC will raise rates by 25 points at next week's meeting.  Source: Bloomberg

Stocks from the S&P 500 index categorised by sector and industry. Size represents market capitalisation. Source: xStation5

The S&P 500 Index gains sharply early in the session on positive sentiment in the broad market. Source: xStation 5

News

• Local bank stocks are gaining rapidly in the face of assurances from US regulators. Citadel Advisors exposed itself with a long position on Western Alliance shares, according to an SEC report yesterday. First Republic (FRC.US) shares are currently gaining more than 55%.

• Meta Platforms (META.US) is once again reporting job cuts and upcoming layoffs in some of its technology divisions. The stock is currently gaining 6%.

• Alphabet (GOOGL.US) intends to implement generative AI solutions in Google Docs and Gmail tools. Google Cloud is entering into a partnership with AI sector research unit, Midjourne. GOOGL shares are currently gaining 3%.

• Powerful gains in the crypto market are being driven by the shares of crypto companies, which are extending the rally from yesterday's session. Shares of Coinbase (COIN.US) are currently gaining close to 8 per cent, however the company reports temporary problems with logging into the platform.