Investing.com -- Shares in midsize U.S. banks were higher in volatile trading on Wednesday, paring back some of the sharp losses seen in the prior session, as uncertainty hung over the sector following the failure of First Republic Bank earlier this week.
The KBW Regional Banking Index gained more than 2% in early dealmaking after it slumped to its lowest level since 2020 on Tuesday.
Among individual companies, PacWest Bancorp (NASDAQ:PACW) stock rallied by more than 9% after it shed more than a fourth of its value. Western Alliance (NYSE:WAL), meanwhile, added over 3%, bouncing back from a record low a day earlier.
The two have lost over $5 billion in market value this year, as comparisons are drawn between them and recently collapsed peers like Silicon Valley Bank and First Republic.
On Monday, JPMorgan (NYSE:JPM) swooped in to snap up most of First Republic's operations after the San Francisco-based lender was seized by regulators. At the time, JPMorgan chief Jamie Dimon said that "this part of the crisis is over."
But the turmoil around the financial services industry has yet to fully abate, with investors on the lookout for another potential weak link.
Adding to the backdrop is the latest interest rate decision from the Federal Reserve later today, with the U.S. central bank widely tipped to raise borrowing costs by 25 basis points. Markets will also be keen for any commentary from Fed chair Jerome Powell about the state of the banking system.