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US stocks rise on inflation data

2023-03-15 HKT 05:32
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  • Investors were cheered by data showing price increases cooled in February. Photo: AFP
    Investors were cheered by data showing price increases cooled in February. Photo: AFP
US stocks closed higher on Tuesday on easing worries about banking sector upheaval and as data showed price increases cooled in February, fuelling hopes that the Federal Reserve could moderate its response to inflation.

Regional banking stocks also bounced back, recouping some of the ground they lost following last week's dramatic collapse of Silicon Valley Bank (SVB).

The Nasdaq ended the day up 2.1 percent at 11,428 following a late rally.

The S&P 500 climbed 1.7 percent to close at 3,920, while the Dow Jones advanced 1.1 percent to 32,155.

Traders received some welcome news at the start of the day with the release of the consumer price index (CPI), which slowed to an annual rate of 6.0 percent last month – still well above the Fed's two percent target.

But core CPI, which excludes volatile food and energy prices, crept up month-on-month by 0.5 percent, slightly higher than analysts predicted.

Regional banking stocks rebounded after a torrid few days of trading in the wake of SVB's collapse, with shares of First Republic Bank rising more than 25 percent.

Seacoast Banking Corporation of Florida ended the day more than 16 percent higher, while KeyCorp bank's share price finished up around seven percent.

The improved mood provides much-needed respite for traders, who have faced a turbulent time since SVB's shock collapse last week in the face of a bank run by depositors.

Attention is now likely to turn to the Fed's interest rate decision next week, with analysts divided on whether the central bank will pause its aggressive campaign of hikes in the face of stubborn inflation.

Among individual companies, Facebook parent Meta Platforms jumped 7.3 percent after announcing it will shed 10,000 jobs in the coming months and leave 5,000 other roles unfilled.

United Airlines tumbled 5.4 percent as it projected a loss in the first quarter due to the hit from a new collective bargaining agreement with pilots. (AFP)