The DOW Jones gained 1.17% to 32,246.55 on Thursday, the S&P 500 was up 1.76% to 3,960.28, and the NASDAQ 100 was up 2.69% to 12,581.39.
Already on Thursday morning, the Dow Jones futures had recorded a slight increase, as well as those of the S&P 500 and the Nasdaq. Specifically, Dow Jones futures rallied 0.3% from fair value, S&P 500 futures gained 0.4% and Nasdaq 100 futures rose 0.5%.
This follows Credit Suisse’s announcement that it would borrow nearly $54 billion from the Swiss National Bank. It was an announcement that helped ease concerns about the possibility of financial contagion.
Crude oil futures also edged up slightly, while the 10-year Treasury yield recovered 2 basis points to 3.51%, erasing losses accumulated on the Credit Suisse lending news.
Wednesday was another bad day for European stocks as Credit Suisse collapsed in Zurich following the recent SVB case. The Swiss bank’s main shareholder, Saudi National Bank, said it would not provide financial support in the event of further liquidity demands, driving Credit Suisse shares to record lows.
Although the Swiss authorities have assured the public that the Swiss central bank will provide liquidity if needed, the markets remain concerned about the upcoming meeting of the European Central Bank which will decide on another rate hike.
Meanwhile, the Credit Suisse crisis also had its impact on the Asian equity markets. The Nikkei fell 0.8%, the Hang Seng nearly 2% and Shanghai 1.1% on Thursday morning.
Also on Thursday, in the morning, the value of gold decreased by 0.5% settling at 1,922 dollars an ounce. After a 4% decline in the previous session, the price of US WTI oil recovered 0.7% and is now valued at $68.10 a barrel. The dollar weakened following the meeting of the European Central Bank which expects a 0.5% rate hike.
As a result, the euro appreciated by 0.26% to 1.0606, the yen rose by 0.4% to 132.88 and the pound rose by 0.11% to 1.2070. The yield on the US 10-year bond rose from 3.45% to 3.49% at the start of the Asian session.
Meanwhile in Europe, despite the bankruptcy of the SVB and the difficulties of Credit Suisse, the European Central Bank is adopting a firm position, raising rates by 50 basis points and keeping an eye on the ongoing market tensions.
Frankfurt officials said the euro area banking sector was well equipped to handle the current crisis thanks to its strong capital and liquidity positions. On the other hand, the Federal Reserve’s decision is awaited in the US, where Goldman Sachs revised its rate hike expectations to 25 basis points after the sector showed the first signs of valuation.
On Wall Street, after the bell rang, the stock market opened quietly, while investors analyze the announcement of the European Central Bank on interest rates and anticipate the next meeting of the Federal Reserve. The Dow Jones fell 0.37%, while the S&P and Nasdaq posted small declines of 0.49% and 0.31% respectively after the initial period close.
Price lists for Thursday 16 March 2023
DOW Jones +1.17% to 32,246.55
S&P 500 +1.76% to 3,960.28
NASDAQ 100 +2.69% to 12,581.39.