- US stocks closed higher Monday as investors tried to navigate uncertainty in the banking system.
- UBS' takeover of Credit Suisse over the weekend cooled some fears of a wider crisis.
- Morgan Stanley said recent bank failures mark what's likely to be a "vicious" end to the bear market.
US stocks rallied on Monday as traders digested efforts to contain a banking crisis and braced for the next policy decision from Federal Open Market Committee meeting this week.
Over the weekend, UBS agreed to acquire Credit Suisse for $3.25 billion at the urging of the Swiss government. This was in an effort to shore up confidence in the banking system following a series of financial hits to the embattled European lender. The forced marriage between the two institutions follows the failures of Silicon Valley Bank and Signature Bank earlier this month, which ignited a crisis of confidence in the banking system.
"With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation," the Swiss National Bank said in a statement released Sunday.
In the US, First Republic Bank shares tanked as much as 50% following a report from the Wall Street Journal that JPMorgan chief Jamie Dimon was leading talks among banks to provide more financial aid to stabilize the struggling lender.
Morgan Stanley's top equity strategist, Mike Wilson, said the fallout in the banking sector marks what's likely to be the start of a "vicious" and painful end to the bear market for equities.
"This is exactly how bear markets end — an unforeseen catalyst that is obvious in hindsight forces market participants to acknowledge what has been right in front of them the entire time," Wilson wrote in a note to clients.
Federal Reserve officials on Tuesday will gather for the two-day policy meeting. Views are split on if the Fed will deliver another interest rate hike or pause to avoid adding to the pain already being heaped on the financial sector by the ongoing bank crisis.
Here's where US indexes stood shortly after the close at 4:00 p.m. on Monday:
- S&P 500:3,951.57, up 0.89%
- Dow Jones Industrial Average: 32,244.58, up 1.2% (382.60 points)
- Nasdaq Composite: 11,675.54, up 0.39%
Here's what else happened today:
A top BlackRock strategist said it's too early to call a stock market bottom because there's "more pain" headed for smaller banks.
Here are four signals to watch in order to know when the banking crisis has ended for the stock market.
- Insider breaks down the most notable winners and losers of the UBS and Credit Suisse takeover deal.
Here's what it was like at the New York Stock Exchange the day Silicon Valley Bank collapsed, according to Wall Street's most-famous trader.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil rose 1.24% to $67.57 per barrel. Brent crude, oil's international benchmark, was up 1.1% to trade at $73.75.
- Gold rose 0.5% to $1,983.70 per ounce.
- The yield on the 10-year Treasury rose 10 basis points to 3.50%.
- Bitcoin fell 2% to $27,867.