After a tumultuous couple of days, stock markets in the United States were poised to rise on Monday as regulators moved to limit the contagion from the collapse of Silicon Valley Bank.
Futures contracts on the S&P 500 climbed 1.6 percent overnight, while those on the Nasdaq climbed 1.7 percent.
In Asia, most stock markets were off their lows by Monday afternoon. Officials in Japan, South Korea and India, some of the largest economies in the region, assuaged concerns of a global ripple effect emanating from the United States.
The worries had been centered on the banking system, which in the past year has had to contend with rising interest rates. In the case of Silicon Valley Bank, its investment strategy based on rates became a money loser, leading to the lender’s demise.
Now, investors expect the Federal Reserve to change its approach to raising interest rates, a move that could ease pressure on banks.
“Markets are pricing for a pause in rate hikes in March,” said Tina Teng, an analyst with CMC Markets in Auckland, New Zealand. Investors, she added, believe that U.S. authorities can contain the risk in the banking system.
In Japan, the Nikkei 225 index was down 1.4 percent, while the South Korean benchmark erased losses and was up 0.5 percent. Indexes in greater China were outliers, with Hong Kong’s Hang Seng rising more than 2 percent after China’s central bank governor, Yi Gang, was reappointed to the job in a surprise move.
Silicon Valley Bank is headquartered in Santa Clara, Calif., and had been a favored lender of the region’s start-ups. Its troubles came to light after another bank’s collapse: Silvergate, a California-based bank that made loans to cryptocurrency companies, announced Wednesday that it would cease operations and liquidate its assets.
On Friday, regulators took control of Silicon Valley Bank, guaranteeing that deposits of up to $250,000 were insured by the Federal Deposit Insurance Corporation, as is the norm. But there was concern that many of the bank’s clients would be on the hook for losses because the bank had many accounts over that limit.
Then on Sunday, the Fed, the Treasury and the F.D.I.C. issued a joint statement, saying that “depositors will have access to all of their money starting Monday, March 13.” The regulators stressed that “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” Also on Sunday, regulators shut down Signature Bank in New York.
The Fed is also setting up an emergency lending program, with approval from the Treasury, to funnel funding to eligible banks so they can “meet the needs of all their depositors.”
One early beneficiary was San Francisco-based First Republic Bank, which on Sunday said that it received additional funding from the Fed and the banking giant JPMorgan Chase.
