The first rally of the republic in volatile trading

Zions Bancorporation added about 4.5%, and US Bancorp rose about 3%. The largest banks also rose, with Citigroup a company.

higher by 6% and Wells Fargo & Co by nearly 5%.

Gains on the broader KBW Nasdaq Commercial Banking Index and the SPDR S&P Regional Banking ETF KRE helped 2.09%

They rise about 3% and 2%, respectively. Both posted their worst performances since 2020 on Monday.

The Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corporation late Sunday rolled out emergency aid to banks and said depositors would be left full after the failure of the Silicon Valley bank and signature bank. The move was meant to assuage customers worried about the safety of their uninsured deposits after last week’s Silicon Valley bank collapse.

“That had a huge positive effect on stabilizing the market,” KeyCorp CEO Chris Gorman told the Wall Street Journal, speaking of the government’s moves. However, he added, “I don’t think it’s time to sound completely clear.”

Some investors were still concerned that some banks could experience outflows like the one that wiped out the Silicon Valley bank. S&P Global on Tuesday put the First Republic, a bank that caters to the wealthy with large account balances, on probation for a credit rating downgrade.

“There is a high degree of uncertainty, and a lot of it has to do with the policy response,” said Christopher McGraty, head of US banking research at KBW. “Unfortunately, this is the world we are in right now. It won’t go away in a day or two.”

Bank stocks are still sharply lower than they were a week ago. First Republic has lost nearly two-thirds of its value since then. Comerica CMA 3.99%

Still down 35%. The shares of the American bank Bancorp fell by about a fifth. PNC less than 10%.

Bank stocks that sold off last week and Monday should fully recover, but it could take some time, said Shanna Cecil, chief executive of Banreon Capital Management.

“Bank stocks are still suffering from systemic stress,” she said.

On Tuesday, Moody’s Investors Service shifted its outlook on the US banking system to negative from stable. The day before, Moody’s said it would review the First Republic and five other banks for possible downgrades to their ratings.

“It’s not over yet,” said Eric Compton, Morningstar banking analyst..

“Nobody knows for sure how things will turn out, but there are realistic scenarios for most of these banks to make it in the end.”

— Rachel Louise Ensign contributed to this article.

Write to Gina Heeb at [email protected]

“Bank stocks are still suffering from systemic stress,” she said.

On Tuesday, ratings agency Moody’s Investors Service shifted its outlook on the US banking system to negative from stable. The day before, Moody’s said it would review the First Republic and five other banks for possible downgrades to their ratings.

“It’s not over yet,” said Eric Compton, morningstar banking analyst. “Nobody knows for sure how things will turn out, but there are realistic scenarios for most of these banks to make it in the end.”