All three major indexes on Wall Street ended higher on Wednesday after Micron Technology and other companies published upbeat revenue outlooks.
The blue-chip Dow Jones finished at 32,717.6, rising 323.35 points or one percent, the S&P 500 concluded the session at 4,027.81, increasing 56.54 points or 1.42 percent, and the tech-leaning Nasdaq closed at 11,926.24, gaining 210.16 points or 1.79 percent.
Analysts noted that the S&P 500 finished above its 50-day moving average of 4,014.19 for the first time since March 6, before the banking crisis started. The Cboe Volatility Index, the U.S. stock market's fear indicator, was at its lowest level since March 8.
Shares of memory chip maker Micron jumped by 7.2 percent after it offered a positive outlook for 2025, with artificial intelligence advancing its sales. Micron predicted a drop in third-quarter revenue, which is in line with the market's expectation, but it did little to hamper the rosy outlook.
Micron's performance on Wednesday helped advance the Nasdaq and S&P 500. It also led the gains in the PHLX semiconductor index, which concluded the trading session 3.3 percent higher.
Lululemon Athletica soared 12.7 percent after the apparel retailer reported an upbeat annual revenue forecast.
BakerAvenue Wealth Management chief investment strategist King Lip explained that the upbeat prospects from these companies provided an indicator of the health of the economy.
"Micron is sort of a microcosm of the global economy because their chips go into so many different industries and sectors," Lip said. "If they are optimistic about things in terms of orders, that means the overall economy is doing well."
Some S&P 500 companies will begin reporting on their first-quarter performance in mid-April. The market is particularly interested in the quarterly report of U.S. banks due to the banking crisis, as noted by analysts. The quarterly results would provide insight into the turmoil in the banking system and how it would influence the Federal Reserve policy.
"People are feeling a little more comfortable with each day that passes since we had the failures."
Michael O'Rourke, Chief Market Strategist at JonesTrading
Michael O'Rourke, chief market strategist at brokerage firm JonesTrading, said the market was "a little more comfortable" as time went on about the situation in the banking sector.
The banking crisis began on March 10 with the sudden shutdown of Santa Clara-based regional lender Silicon Valley Bank (SVB) after a bank run the day before, when its customers withdrew $42 billion in just a day. The turmoil significantly affects global markets, including equities, forex trading and bonds.
On Monday, First Citizens BancShares purchased the assets and loans of SVB at a discounted rate, a process facilitated by the Federal Deposit Insurance Corporation (FDIC).
Inflation updates
This Friday, the U.S. Bureau of Economic Analysis (BEA) will publish the personal consumption expenditures (PCE) data for February. The PCE data, which measures consumer prices, is the Fed's preferred measure of inflation due to its broader coverage of the economy.
Analysts predicted that the year-over-year core PCE would be at 4.3 percent, down from 4.7 percent in the previous month. The month-over-month core PCE is also expected to cool from 0.6 percent in January to 0.4 percent last month.
According to investment bank Credit Suisse, prices of goods remained the "key driver" of disinflation, with housing and other services staying strong. Nevertheless, the personal spending rate is expected to cool down in February, showing 0.3 percent growth. Last January, U.S. personal spending grew by 1.8 percent, significantly exceeding earlier expectations.
Analysts at the bank said while personal spending would likely stabilize, there was a chance for an upward revision to January's consumer spending. It would solidify the outlook for the U.S. gross domestic product growth in the first quarter.
The Fed began to raise interest rates in March last year to combat inflation. Analysts said officials had expected a soft landing for the economy, a situation where the economy would slow down but did not contract. The market, however, is concerned that the U.S. is heading to a recession due to the Fed's hawkish policy.