The Dow Jones index advanced by 0.98% to 32,560.60 points, the tech-dominated Nasdaq climbed 1.58% to 11,860.11 points and the S&P 500 by 1.30% to 4,002.87 points.

Investors seemed encouraged by Treasury Secretary Janet Yellen's remarks to the American Bankers Association (ABA).

"The situation is stabilizing. And the U.S. banking system remains strong," Biden's economy and finance minister said. "Actions similar to the quick loans to banks after the collapse of Silicon Valley Bank and Signature Bank "could be justified if small institutions experience run-off on withdrawals that pose a risk of contagion," she said.

"U.S. authorities are looking at ways to temporarily extend FDIC coverage of deposits beyond the current $250,000 limit," said Art Hogan of B. Riley Wealth Management.

For Steve Sosnick, chief strategist at Interactive Brokers, "banking problems have faded into the background": "it may be a little early to say that we are completely out of the woodwork but we have not heard about any new problems on a bank this week and this is good news for the market".

The banking sector (+2.47%), together with the energy sector, led the market gain.

The US bank First Republic, still laminated on Wall Street Monday despite the lifelines launched by the authorities and competing institutions, soared almost 30% to $ 15.78 after dropping 47% the day before.

Among other regional properties, Fifth Third gained 4.50%, Western Alliance Bancorporation 14.96% and PacWest Bancorp 18.77%.

Investors have mainly had their eyes turned to the US central bank (Fed) which ends a meeting on Wednesday with, to comment on its monetary decision, a press conference of its chairman Jerome Powell and new economic forecasts and projections of rate evolution.

"It is not very clear as far as the Fed is concerned, although the consensus is for a rate hike of 25 basis points," which should lead them to between 4.75% and 5%, said Steve Sosnick.

The banking turbulence, partly caused by the drastic rise in interest rates over the past year, will indeed weigh on the discussions of the Monetary Committee.

The key will be "in the press conference, where the president will ensure that there is not really a banking crisis," the analyst added.

The projection tables of the evolution of rates will also be closely watched, while the market now anticipates rate cuts as early as the summer.

In another register, the title of Tesla jumped 7.82%, while the group of Elon Musk was rewarded with a better rating on its debt by Moody's.

A further cost cut with the elimination of 9,000 new jobs at Amazon was well received by investors, the stock climbed 2.97%.

The highly volatile share of video game distribution group GameStop soared after the closure (+31%), after the announcement of profits above forecasts in the fourth quarter against a loss a year earlier.

© 2023 AFP