The major stock market indexes headed back to early highs into Tuesday's close. Stocks fell in the early afternoon after a Russian jet collided with a U.S. drone in the Black Sea. Traders eventually shrugged off the news, ahead of a last-hour rebound.
The CME FedWatch Tool now expects a 77% chance of a 25-basis-point rate hike at the Federal Reserve's March meeting. Nearly 23% expect no change in rates.
NYSE and Nasdaq volume was sharply lower than on Monday, in preliminary numbers.
The Dow Jones Industrial Average rose 1.1% while the S&P 500 gained 1.7%. The Nasdaq composite recouped 2.1% and and small-cap Russell 2000 reclaimed 1.9%. The Russell was boosted by its 15% banking component.
The Dow and S&P 500 remain below their 50- and 200-day moving averages, while the Nasdaq reclaimed the 50- and 200-day lines.
The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF regained 2.3%. The Innovator IBD 50 ETF added 2.5%.
The 10-year U.S. Treasury yield rose 12 basis points to 3.64%.
The CPI report said inflation rose 0.4%, in line with expectations and better than January's 0.5% increase. Year-over-year 6.0% inflation also met expectations, and it was a decrease from January's 6.4%.
The core number, which excludes food and energy, came in at 0.5%, higher than the 0.4% forecast. Year over year was in line at 5.5%.
Crude oil lost 4.4% to $71.50 per barrel, the lowest level since Dec. 9, as the dollar gained strength after a recent pullback. Oil prices and the dollar often show an inverse relationship.
Bitcoin futures rallied 2.9% to $25,110 as investors bought the digital asset for the third day in a row. The Feds have come to the rescue of depositors of banks catering to crypto clients.
Stock Market Today: Regional Banks Post Big Gains
First Republic Bank rebounded 27% in heavy volume, after plummeting on news it had liquidity issues. It received an infusion from the Federal Reserve Bank and JPMorgan Chase.
Western Alliance eased off from earlier gains, adding 14.4% in heavy volume, as regional banks found buyers. KeyCorp climbed 6.9% with the group.
The SPDR Select Regional Bank ETF pulled back about 8% from early gains, rising 2.1%, as the sector shook off stock market selling pressure. The SPDR Select Financial ETF gained 2%.
Charles Schwab rallied over 9.2% after its recent sell-off, as bank stocks recovered. The company's CEO Walt Bettinger, told CNBC "What we're seeing is asset inflows to the firm in significant numbers."
The brokerage giant took in $42 billion in net new assets in February, and has trended an average $2 billion per day in March. Bettinger put his money where his mouth was, buying 50,000 shares Tuesday for his personal account.
Futures Tumble As European Banks Fall On Credit Suisse
Meta Platforms Stock Closes At Day's High
Facebook parent Meta Platforms gapped up 7.3% after announcing it will lay off another 10,000 workers and eliminate about 5,000 job openings as part of its restructuring plan. These cuts are on top of November's 13% workforce reduction.
Meta also cut its full-year 2023 operating expense guidance by $3 billion.
United Airlines gapped down 5.4% in heavy volume in Tuesday's stock market, sending it below its 50-day line, triggering a sell signal. The move came after the airline projected a Q1 loss per share, due to higher fuel costs and a one-time $55 million charge from a recent collective bargaining agreement.
Alaska Airlines fell 4.1% on news it sees higher Q1 fuel costs and a negative pretax margin.
DoorDash rose 5.9% after an appeals court reaffirmed California's Proposition 22, which designates drivers as independent contractors. Ride-sharing firm Uber Technologies rose 5% and Lyft pared earlier gains, rising 0.6% on the ruling.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
