Business Maverick: S&P futures jump on SVB backstop, rate bets shift: markets wrap

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US stock futures rallied more than 1.5% while the dollar and bond yields tumbled as investors digested the steps taken by regulators to shore up the American financial sector in the wake of Silicon Valley Bank’s failure.

Treasury Secretary Janet Yellen said that her office would protect “all depositors” at the bank, whose demise Friday marked the biggest such event since 2008. The government actions will also include a new lending program that Federal Reserve officials said would be big enough to protect uninsured deposits in the wider US banking system.

A gauge of dollar strength declined by 0.8%, with the currencies of Australia, New Zealand and Norway all advancing at least 1% versus the greenback. Japanese stocks led losses in Asia, with financials being the biggest drag on the benchmark Topix gauge. The gauge headed for its biggest two-day loss in a year as the yen continued to strengthen.

Monday’s moves in markets come after risk assets got pummeled last week, with the US stock benchmark suffering its worst week since September. Wall Street’s so-called “fear gauge” spiked, with the Cboe Volatility Index hitting the highest this year. Treasury two-year yields plummeted 28 basis points to 4.59%.

 

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