The Dow Jones Industrials kept the momentum going, rocketing 316.02 points, or 1%, to 32,560.60.
The S&P 500 leaped 51.31 points, or 1.3%, to 4,002.87.
The NASDAQ Composite hiked 184.57 points, or 1.6%, to 11,860.11.
Regional banks surged Tuesday, led by First Republic. The beaten-down bank jumped 34.8%, a day after losing 47%. Regionals got a boost after Treasury Secretary Janet Yellen said Tuesday morning that the government is ready to provide further guarantees of deposits if the banking crisis worsens.
Wall Street is coming off a strong rally, with the Dow surging more than 380 points Monday, while the S&P 500 gained 0.9%. The action came a day after a forced takeover of Credit Suisse by UBS, which was engineered by the Swiss government. Investors also welcomed news that JPMorgan Chase could be advising embattled First Republic Bank on strategic alternatives.
Investors now expect a slower pace of tightening from the Federal Reserve in light of the banking crisis. Traders now are pricing in a 83% chance of a quarter-point rate hike when the Fed wraps its two-day policy meeting on Wednesday. The probability of a pause is at 16.6%.
Prices for the 10-year Treasury slid, raising yields to 3.60% from Monday’s 3.49%. Treasury prices and yields move in opposite directions.
Oil prices regained $1.86 to $69.50 U.S. a barrel.
Gold prices stumbled $39.40 to $1,943.40 U.S. an ounce.