How S&P 500 surges as banking crisis balances

The major moving averages started Thursday’s session with another move higher. The Dow Jones rose more than 100 points. Meanwhile, the S&P 500 and Nasdaq also surged.

The S&P 500 rallied Thursday as investors bet on the region’s worst banking crisis is over. The S&P 500 index surged 0.2% to its highest level since March 7, compelling its gain from the benchmark’s March low to about 6% during the height of bank concerns.

The Nasdaq composite rose o.4% as technology stocks continued to attract renewed interest from investors. The Dow Jones Industrial Average slightly traded above by about 24 points.

The Cboe Volatility Index, Wall Street’s favourite index of turmoil in the S&P 500, will be over the next 30 days, falling to 19 levels after hitting 30 in the middle of March. Wall Street’s fear index returned to where it was at the beginning of the month.

It is engendering faith that the Federal Reserve will slacken its tightening strategy as the labour market decreases, as weekly unemployment claims rose from 7,000 to 198,000.

Chip stocks like AMD have been among the best on the market. The VanEck Vector Semiconductor (SMH) ETF rose 1.4% on Thursday, increasing its year-to-date gain to more than 28%

Also, in the technology space, shares of Amazon and Apple rose.

Within a month, investors have been experiencing a 4% increase in the Nasdaq Composite and a nearly 2% rise in the S&P 500, most likely caused by the federal rate increases and the downfall of Silicon Valley Bank.

Most investors think the market is ahead of itself.

“Financial markets collectively appreciate the best of both worlds: a recession that allows for low-interest rates and a sharp drop in inflation but does not have a major negative impact on corporate earnings,” Barclays analyst Ajay Rajadhyasksha wrote in a note on Thursday.

Other stocks are also making headways

Bed Bath & Beyond’s share fell nearly 16% as the company warned it might file for bankruptcy after making a $300 million share takeover bid. The company also said that loans taken out last year had been cut.

UBS shares increased by 2%. Yesterday, following the announcement that Sergio Ermotti would resume his role as CEO to manage the Credit Suisse takeover, the bank made the move official.