US Stocks on Bullish Run as Worst of Bank Run Passed

US Stocks on Bullish Run as Worst of Bank Run Passed

The United States (US) stock market is on a bullish run today as marked by the second consecutive day of gain by top indices as investors fear the worst of the bank run has passed. The Nasdaq Composite (INDEXNASDAQ: .IXIC) is leading the market momentum after inking a 0.73% growth, adding more than 87 points to close Thursday’s session at 12,013.47.

The broader stock benchmark, the S&P 500 (INDEXSP: .INX) also recorded a positive uptick with a 0.57% upsurge to 4,050.83. The Dow Jones Industrial Average (INDEXDJX: .DJI) was not left behind in the growth mix, pulling a decisive 0.43% to close Thursday’s session at 32,859.03.

March was a remarkably burdensome month as events in the banking ecosystem sought to erode the efforts to rebalance the economy for the better part of the first quarter. The collapse of Silicon Valley Bank (SVB) served as a crucial highlight for other regional banks including Signature Bank and Silvergate Bank who also met their waterloo in the month.

Despite these events which have also left First Republic Bank (NYSE: FRC) at the mercy of a major bailout from top financial service players, the recent gains from the major stock indices have pushed the Nasdaq Composite to print a total of 4% for March. In the same vein, the S&P 500 managed a 2% uptrend.

The role of the Federal Reserve in hiking interest rates by 25 basis points in March has also underscored the focus of the regulators which is in completely eradicating inflation.

“Collectively, financial markets are pricing in the best of both worlds – a recession that allows rates to be low and brings inflation down sharply, yet one that does not have a massively negative effect on corporate earnings,” Barclays analyst Ajay Rajadhyaksha wrote in a Thursday note.

US Stock Market and the Tech Innuendo

As the events in the banking ecosystem riled the market and the broader US stock market, tech stocks that are generally known to power growth underperformed for the month.

“The valuations of some of these companies are remnant to, kind of, where we went back during the pandemic phase,” said Sarat Sethi, portfolio manager at Douglas C. Lane & Associates on CNBC’s “Power Lunch.” “Investors are saying, ‘We’re gonna see a slowdown, let’s go back to this playbook.’”

The tech firms have generally buckled under the weight of the events in the market with further layoffs recorded last year spilling into the new year. In all, the most visible sentiment is the advent of ChatGPT which the likes of Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc (NASDAQ: GOOGL) are fully invested in.

Many believe the advances in these AI solutions which also includes Google’s Bard will further cause a slump in the already receding job count, creating another ripple effect for the broader market in the near future.

US Stocks on Bullish Run as Worst of Bank Run Passed