Bruised Banks Fuel Short-Covering Rally in Stocks: Markets Wrap
- Fed’s Bullard says higher rates likely needed to cool prices
- St. Louis chief says base case is slower growth, not recession
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The chaotic week for financial markets ended with a rally in risk assets — possibly driven by short-covering — as regional banks rebounded from a brutal rout and solid jobs data tempered fears of a recession. Treasuries fell.
A rally in equities halted the S&P 500’s longest losing streak since February. PacWest Bancorp soared over 80%, following a rout that saw its shares tumbling to a record low. Western Alliance Bancorp and First Horizon Corp., which were also strongly hit this week, jumped. The KBW Bank Index of financial heavyweights rebounded from its lowest since September 2020.