Nasdaq Reclaims Key Levels as Banks Rebound; Meta Flashes Buy Signal

The stock market staged a forceful rebound on Tuesday, with the Nasdaq reclaiming technical ground it had lost in recent days and major indexes posting solid gains despite a volatile afternoon. The Dow Jones Industrial Average climbed 1.1%, the S&P 500 rose 1.65%, and the Nasdaq composite jumped 2.1%, with the small-cap Russell 2000 gaining 1.9%. The rally was driven in large part by a dramatic reversal in bank stocks, which had been hammered the day before but surged at the open before retreating from their highs.

First Republic Bank led the rebound with a 27% jump to 39.63, though it had spiked as high as 50.97 in early trading before backing off sharply. The stock had plunged 62% on Monday. Western Alliance Bancorp surged as much as 53% at the open but wilted through the afternoon, briefly dipping into double-digit losses before closing up 14%. The stock had fallen 47% the previous day. PacWest Bancorp climbed nearly 34%, while Charles Schwab gained 9.2% after CEO Walt Bettinger said the firm was seeing significant deposit inflows and disclosed that he had purchased Schwab stock himself on Tuesday. KeyCorp rose 2.3%, and JPMorgan Chase gained 2.6%. Wells Fargo jumped 4.6% and filed for a potential $9.5 billion shelf offering, though the bank indicated no immediate plans to execute it. The Financial Select SPDR ETF advanced 2%, while the Regional Banking ETF climbed just over 2%, though both were well off their morning highs.

The banking sector's troubles, however, remained serious. S&P Global Ratings placed First Republic on watch for a possible credit downgrade, citing the bank's likely need to increase wholesale borrowing to shore up liquidity—a move that would pressure profit margins. S&P Global also put Western Alliance and four other regional banks on downgrade watch. Moody's Investors Service lowered its outlook for the entire banking sector on Tuesday morning, though the move did not derail the day's rebound. The underlying concern persists: regional banks face a squeeze on profits as they raise deposit rates or increase borrowing costs to fund their operations, a structural headwind that could weigh on bank valuations even as immediate contagion fears ease.

Beyond the banking sector, several other stocks flashed technical buy signals. Meta Platforms jumped 7.25% to 194.02 after announcing it would cut another 10,000 jobs in the coming months, following 11,000 layoffs in November. The stock is working on a 197.26 buy point from a flat base, though investors could have used earlier entries based on a downward-sloping trendline or a move above the March 7 high of 190.36. Tesla rebounded 5% to 183.26 after finding support at its 50-day moving average on Monday, fueled by strong China electric vehicle registrations. The stock is forming a possible bottoming base with a 217.75 buy point, though it remains below the 200-day line.

Other stocks near buy points included Boeing, which gapped above its 50-day line Tuesday morning but faded to close up just 1.9% at 207.28 after failing to hold early gains. The aerospace company won 78 confirmed orders for 787 Dreamliner jets from two Saudi airlines, with options for 43 more. Applied Materials popped 3.9% to 120.34 after bouncing from its 50-day line, working on a 125.02 flat base. Lantheus rose 3.2% to 73.02, Fortinet climbed 2.7% to 60.89, MSCI rallied 3.8% to 548.25, and MercadoLibre jumped 4.5% to 1,214.96. Lennar, the homebuilder, beat fiscal first-quarter earnings estimates and guided up on second-quarter orders, with the stock climbing 3.6% in extended trading after rising 1.8% to 100.77 during the regular session.

The market's technical picture showed the Nasdaq composite rebounding back above both its 50-day and 200-day moving averages, closing near intraday highs. The S&P 500 and Dow Jones rose but encountered resistance near their 200-day lines. Winners outnumbered losers by 3-to-1 on the New York Stock Exchange and nearly 2-to-1 on the Nasdaq. The 10-year Treasury yield rose 12 basis points to 3.63%, while the 2-year yield leapt 19 basis points to 4.22%, with markets pricing in expectations for quarter-point Federal Reserve rate increases in March and May, followed by rate cuts over the summer. Crude oil prices tumbled 4.6% to $71.33 a barrel, and copper futures sank 1.45%.

Tuesday marked the second day of a market rally attempt on the Nasdaq, and investors are watching for a follow-through day—a confirmation signal that could arrive late this week or next week. The sustainability of the rebound hinges significantly on the banking sector. If First Republic, Western Alliance, PacWest, and the broader financial system continue to stabilize, the rally attempt may gain traction. But any sign that bank contagion is spreading would almost certainly send financials and the broader market sharply lower. For now, investors are advised to build watchlists of stocks holding near buy points and showing relative strength, while remaining cautious in an environment defined by volatility and news-driven swings.