Shares of regional banks are growing, as after the publication of the consumer price index

US stocks rose on Tuesday as important inflation data came in line with expectations. Shares of regional banks rose, offsetting some of their losses after the collapse of Silicon Valley Bank.

The S&P 500 (^GSPC) added 1.3%, while the Dow Jones Industrial Average (^DJI) advanced 1%. Contracts for the high-tech Nasdaq Composite (^IXIC) rose 2%.

Bond yields have risen. The benchmark 10-year US Treasury yield rose to 3.6% on Tuesday morning from 3.54% on Monday. The leading end of the yield curve, the two-year yield rose 4.2%. Oil prices fell, with crude oil (CL=F) trading at $71.50.

The February Consumer Price Index (CPI) showed prices rose 6.0% in February year-over-year, the smallest increase since September 2021 and in line with economists’ expectations. Meanwhile, the core consumer price index, which excludes food and energy, rose 5.5%, also in line with expectations.

The housing component of the consumer price index, which makes up about a third of the overall inflation index, rose 0.8% over the past month and 8.1% year-on-year in February. This BLS data is different from Redfin’s real-time data, which shows that the rental market has begun to cool.

The economic data comes at a critical juncture in the Federal Reserve’s fight against inflation as the collapse of the Silicon Valley bank and ongoing ramifications have added a new wrinkle.

On Wednesday, the Commerce Department will release a February retail sales report showing how much was spent in stores, online and at restaurants. Meanwhile, the February Producer Price Index, which measures how much suppliers are charging businesses, will be released on the same day.

Investors remained glued to the latest news about the collapse of SVB Financial Group (SIVB) and its consequences for the banking sector. The Securities and Exchange Commission and the Department of Justice are investigating the closure of Silicon Valley Bank, according to the Wall Street Journal.

Bank sentiment recovered for members of the KBW Bank Index (^BKX) as the index rose nearly 3% on Tuesday. Large-cap index participants including Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) traded higher.

Shares in other regional banks rose, including First Republic Bank (FRC), which surged nearly 30% on Tuesday morning after a record fall on Monday. PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL), Regions Financial (RF) and Zions Bancorporation (ZION) jumped on Tuesday.

The question remains: who will be the contender for the remaining assets of SVB after the FDIC takeover? The FDIC had hoped to sell the bank’s assets on Sunday, but instead set up a bank to hold SVB deposits and announced that savers would be bailed out.

Meanwhile, the market is likely to be “fighting” with the Fed’s course as it must “balance financial stability” against “inflationary risks,” according to data from the US Market Analysis Group at JPMorgan.

So far, market participants are rapidly changing their expectations for the Fed’s next move. CME Group data shows that 80% of traders expect a 25 basis point rate hike at the Fed’s March meeting, while 20% expect rates to remain unchanged, a sharp shift from last week.

In addition, the Fed said it would conduct an analysis of the implications of a Silicon Valley bank. The results will be released by May 1, the central bank said on Monday. The review will be led by Michael Barr, Fed vice chairman for oversight.

“Events involving a Silicon Valley bank require careful, transparent and prompt review by the Federal Reserve,” Fed Chairman Jerome Powell said in a statement.

Federal Reserve Chairman Jerome H. Powell testifies ahead of House of Financial Services hearing in case

Federal Reserve Chairman Jerome H. Powell testifies ahead of a House Financial Services hearing on the Federal Reserve’s Mid-Year Report on Monetary Policy on Capitol Hill in Washington, USA, March 8, 2023. REUTERS/Kevin Lamarque.

As for other moves in individual stocks, KeyCorp (KEY) was up almost 7% on Tuesday after falling in the previous trading session. Shares of Credit Suisse Group AG (CS) remained in the red, while shares of Charles Schwab (SCHW) rebounded.

Here are the stocks that are trending on Yahoo Finance:

  • Gitlab (GTLB): The company reported a weaker first-quarter and full-year revenue guidance, falling short of analysts’ expectations.

  • Meta (META): Chief Executive Mark Zuckerberg said the company is laying off another 10,000 employees to hedge against economic instability.

  • Boeing (bachelor): The aerospace giant has received an order from two Saudi Arabian airlines — state-owned and new national player Riyadh Air — to buy 78 aircraft, with an option to buy 43 more, Yahoo Finance’s Brian Sozzi said.

  • Uber (uber): A California court has ruled that drivers can be treated like independent contractors rather than employees.

  • 3M Company (MMM): Stocks trade lower amid litigation over faulty earplugs, a dismal fourth quarter and a failed 2023 guidance.

  • AMS Entertainment (AMS): The company said that based on preliminary calculations, shareholders voted to increase the firm’s shareholding and convert AMC preferred stock into common stock.

In terms of earnings, FedEx (FDX), Adobe (ADBE), Dollar General (DG) and Lennar (LEN) will release quarterly results this week.

Elsewhere in the crypto market, Bitcoin (BTC-USD) has surged over 15% to over $25,000 in the past 24 hours amid SVB and Signature Bank crashes. Bitcoin is up 37% this year, outperforming the S&P 500 by a factor of 10, according to Valkyrie research.

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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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