Tech rally leads US stocks higher as investors refocus on rates after bank fears recede

• The technology sector led US stocks higher on Wednesday as investors refocus on interest rates.
• The 2-year and 10-year US Treasury yields have been steadily declining in recent weeks.
• Investors are pricing in at least two interest rate cuts by the end of the year.

US stocks surged on Wednesday, led by technology shares, as investors refocus away from the US banking crisis and towards the direction of interest rates through the rest of the year.

Following the collapse of Silicon Valley Bank, interest rates have dropped to levels not seen in months, with the 2-Year US Treasury yield hovering around the 4% level, while the 10-Year US Treasury yield sits at about 3.6%. That's a far cry from the levels seen earlier this month, with the 2-year above 5% and the 10-year above 4%.

The fall in yields is boosting the types of stocks that were penalized for soaring interest rates, mainly technology stocks. The Nasdaq 100 is up more than 15% year-to-date, which is about five times the return seen in the S&P 500 over the same time period.

Investors are setting their focus on where interest rates go from here, and according to the CME FedWatch Tool, the answer is lower. Current market expectations expect at least two interest rate cuts from the Federal Reserve by the end of this year.

Here's where US indexes stood shortly after the 9:30 a.m. ET opening bell on Wednesday:

• S&P 500: 4,010.42, up 1%
• Dow Jones Industrial Average: 32,615.76, up 0.68% (221.51 points)
• Nasdaq Composite: 11,872.04, up 1.33%

Here's what else is happening this morning:

• Binance customers pulled more than $1 billion from the troubled cryptocurrency giant the day US authorities slammed it with a lawsuit.
• Households are predicting that mortgage rates will soar from 6.4% to 8.4%, the latest edition of the New York Federal Reserve's annual SCE Housing Survey showed.
• Silicon Valley Bank saw $142 billion in deposits fly out the door in just two days in what led to the fastest fall of a bank in history.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil rose 1.11% to $74.01 per barrel. Brent crude, oil's international benchmark, jumped 0.94% to $79.39.
• Gold fell 0.43% to $1,965.10 per ounce.
• The yield on the 10-year Treasury rose four basis points to 3.61%.
• Bitcoin jumped 3.61% to $28,367, while ether jumped 1.57% to $1,807.