Wall Street closed higher on the eve of the Fed’s rate decision, while the banking sector turmoil subsided to give way to a rebound in shares of regional banks. The Dow Jones rose 0.98% to 32,560.60 points, the S&P 500 rose 1.32% to 4,003.67 points and the Nasdaq advanced 1.58% to 11,860.11 points.
Showing that fears of contagion in the banking sector are cooling, First Republic Bank jumped more than 30% to close 29.56% after Treasury Secretary Janet Yellen said the US government would ready to step back in and offer support to smaller banks in case of bank runs. The First Republic rally also comes on the heels of reports suggesting the bank is considering various options, including selling parts of the business if it fails to recover deposit outflows.