Wall Street opens higher with Dow Jones up more than 300 points and S&P 500 rising 0.6%

UBS's forced marriage with Credit Suisse seemed to stabilize fears of a banking contagion Monday as the widely-watched Dow rose more than 300 points Monday at market open, and the S&P 500 similarly surged .6 percent.   

Traders on Wall Street were likely surprised to see that the respected indexes' stabilization - a signal that banks may be on the road to recovery following a series of failures that have threatened to upend the American economy this month.

Since SVB's failure more than a week ago, experts have speculated whether the bank’s failure could spell doom for the US banking system, and spur a repeat of the failures that spawned the 2008 recession.

Shares of smaller, regional firms, such San Francisco's First Republic Bank have since struggled, forced to address a sudden rise in deposits following the bank's collapse. 

First Republic - one of the main indicators of the current banking volatility - on Monday extended a ten-day rout that's seen its evaluation fall 80 percent, after its shares fell sharply by nearly 40 percent before recovering by half as trading began.

Traders at the New York Stock Exchange Monday were amazed to see the market turmoil affecting some of the US biggest stock indexes had stabilized - a signal banks may be on the road to recovery after a series of failures that have threatened the American economy

The Dow rose more than 300 points Monday at market open, market turmoil hit indexes much more modestly than what has been seen in recent weeks

The drop comes days after the lender was said to be receiving a $30 billion lifeline from big banks including JP Morgan and Wells Fargo, in a move that's since been hailed by the US Treasury as 'demonstrative of American banks' 'resilience'.

A shotgun merger engineered by Swiss authorities to avoid more market-shaking turmoil has sought to quell the unrest, with Switzerland-based UBS agreeing to buy its New York-based rival for $3.23 billion.

As a result, market turmoil hit indexes much more modestly on Monday, showing that investor optimism in the banking sector could be on the rise - regardless of the embattled, current states of regional firms like First Republic. 

The Dow - known for its 30 blue-chip firms thought to be unteachable in the face of market failures - as of 11 am gained has gained 377 points, for a pronounced percentage increase of 1.1 percent. 

The S&P 500, meanwhile, has risen by 88 points, for an increase of nearly 1 percent. 

The Nasdaq 100 also rose slightly, by .12 percent, less than a week after thousands of depositors across the country descended on regional lenders en masse, causing a ripple effect that has threatened to upend the banking sector.

The volatility has since led to a surge in bond prices and a drop in bank shares, and spurred the recent intervention from the Swiss government - the first merger of systemically important banks since the 2008 crisis.

Instead, the deal between the twin pillars of Swiss has stoked fears of Americans faced with the prospect of yet another recession less than 15 years removed from the crisis that saw America's big banks bailed out by the federal government.

The tech-heavy S&P 500 similarly surged .6 percent, despite of the current states of local firms who reported an outflow of deposits last week

Since SVB's failure more than a week ago, experts have speculated whether the bank’s failure could spell doom for the US banking system, and spur a repeat of the 2008 failures that spawned the most recent recession

The rises come less than a week after thousands of depositors across the country descended on regional lenders en masse, causing a ripple effect that has since threatened to upend the banking sector

Shares have since rebounded slightly to around $2, after falling to as low $1.76 last week following the bank's announcement that it would overtake its local rival  - likely raising alarms to millions of investors.

Similar unrest is being felt by First Republic - enough so that the S&P on Monday elected to lower its long-term credit rating to B+ from BB+, after already downgrading the lender to sub-investment grade, or junk, territory last week.

Upon airing the decision, the ratings agency said that the recent loan from lenders like Citigroup Wells Fargo, Goldman Sachs, Morgan Stanley, BNY Mellon, PNC Bank, State Street, Truist Bank, and US Bank did not address the 'substantial' challenges the bank is facing - something likely occurring in other regional banks as well.

Before the bell, shares in First Republic fell as much as 37 percent.  

Shares have since recouped slightly as of 8:30 am, while several banks left reeling in the wake of SVB’s recent collapse saw some stabilization - after US officials insisted deposit outflows had slowed last week.

On Friday, in an unprecedented show of support from 11 banking behemoths including JPMorgan Chase and Bank of America, the bank was given a multibillion-dollar pay package to address its recent surge in deposits.

The recent movement in its share price seems to indicate the uninsured cash injection perhaps was not enough to solve its burgeoning liquidity crisis, with the S&P said on Sunday plunging the bank deeper into junk status with a B+ rating.

Shares of some the big banks involved in the unprecedented recuse package also were markedly lower at market open, with JPMorgan, Wells Fargo, Bank of America, and Citigroup Inc all down between 0.3 percent and 1 percent. 

First Republic's pronounced premarket loss has recouped slightly at the bell, as shares of regional banks continue to bear the brunt of a rampant rise in deposits amid American uncertainty over the banking sector. 

Compounding this unrest is the fact that traders raised bets of the Fed likely hitting a pause on rate hikes Wednesday to ensure financial stability, and the recent state-backed takeover of troubled peer Credit Suisse Group AG.

Shares of smaller, regional firms, such San Francisco's First Republic Bank - which has surfaced as one of the main indicators of current market volatility - are still struggling, after being forced to address a sudden rise in deposits following SVB's collapse

Before the bell, shares in the bank - which has surfaced as one of the main indicators of the current banking volatility - fell as much as 37 percent, extending a ten-day rout that's seen its value fall a full 80 percent in a matter of days

Some midsized US lenders said to be struggling rose over the weekend in premarket trading, with Arizona-based Western Alliance Bancorp briefly turning positive and PacWest Bancorp gaining 5.6 percent.

Both banks are among hundreds who have seen 'elevated' withdrawals after the consecutive bank failures earlier this month, as a result decreased trust in the US banking system.

Bigger lenders located on Wall Street - including banking's 'big four' - have since remained under pressure.

Still, U.S. stock futures were off their session lows. A decline in Treasury yields on bets of less aggressive policy moves from the Fed supported gains in some technology and growth stocks such as Apple and Microsoft.

'Traders are looking for short- term opportunities ahead of Wednesday's Fed meeting,' said Jason Pride, chief investment officer of private wealth at Glenmede.

'Investors are still worried about the banking industry, even though UBS has agreed to take over Credit Suisse. They are still a little bit worried that there are other banks out there that need shoring up that we're just not familiar with.'

Traders' bets are now tilted towards a no-hike scenario, with 39% expecting the Fed to raise rates by 25 basis points.

Investors also await economic data including existing home sales, weekly jobless claims and durable goods this week to gauge the strength of the U.S. economy.

Over the weekend, UBS agreed to buy its US arm Credit Suisse  for $3.23 billion, in a shotgun merger engineered by Swiss authorities to avoid more market-shaking turmoil in the banking sector. Suisse's New York headquarters on Madison Avenue is seen here

U.S.-listed shares of Suisse were subsequently down 58.4 percent in premarket trading, set to open at a fresh record low already reached last week after the bank admitted finding 'material weaknesses' in an annual report that estimated it lost $8billion last year

At 6:44 a.m. ET, Dow e-minis were up 10 points, or 0.03%, S&P 500 e-minis were up 3.5 points, or 0.09%, and Nasdaq 100 e-minis were up 13.25 points, or 0.1%.

Top central banks also moved on Sunday to bolster the flow of cash around the world, with the Fed offering daily currency swaps to ensure banks in Canada, Britain, Japan, Switzerland and the eurozone would have the dollars needed to operate.

Big U.S. banks such as JPMorgan Chase & Co, Citigroup and Morgan Stanley fell between 0.2% and 1.2%.

The S&P Banking index and the KBW Regional Banking index on Friday logged their largest two-week drop since March 2020.