U.S. stocks jump as investors brace for Fed interest rate decision

  • US stocks jumped as investors awaited the Fed’s decision on monetary policy on Wednesday.
  • The central bank is expected to raise rates by 25 basis points as inflation remains high.
  • Bank shares rose after Treasury Secretary Janet Yellen said deposit insurance could expand.

US stocks rose on Tuesday as investors braced for the Fed’s next interest rate decision, while the banking sector rallied on the prospect of more deposit insurance.

Central banks have begun their two-day meeting of the Federal Open Market Committee and are set to announce their next policy move Wednesday afternoon. Markets are pricing in an 83% chance that the Fed will raise rates by 25 basis points.

Bank shares rose after Treasury Secretary Janet Yellen said government deposit protection could be expanded. Shares of First Republic Bank jumped 45% a day after falling to a record low. Meanwhile, S&P Regional Banking’s SPDR exchange-traded fund rose 5%, its best day since January 2021.

Here’s where the US stocks were shortly after the 4:00 pm close on Tuesday:

Here’s what else happened today:

In commodities, bonds and cryptocurrencies:

  • West Texas Intermediate crude rose 2.75% to $69.50 a barrel. Brent crude, the international oil benchmark, fell 0.24% to trade at $75.14.
  • Gold fell 2.06% to $1,937.70 an ounce.
  • The 10-year Treasury yield rose 12 basis points to 3.606%.
  • Bitcoin climbed 1.35% to $28,158.21.

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