Stocks tick higher after another dizzying day on Wall Street

NEW YORK — Stocks rose Thursday, but only after another see-saw day for Wall Street where a big show of strength from the morning vanished and worries rose about the banking industry.

The S&P 500 added 0.3% for its third gain in four days, but it had been on track for a much healthier gain of 1.8% in the morning. The Dow Jones Industrial Average saw an early gain of 481 points disappear, and it likewise dipped to a brief loss before closing with a rise of 75 points, or 0.2%. Strength for technology stocks helped the Nasdaq composite hold up better than the rest of the market, and it added 1%.

Two big questions have been causing big swings for Wall Street this month, and investors still don’t have a final answer for either. On one, investors are worried about whether more banks will suffer a debilitating exodus of customers following the secondand third-largest U.S. bank failures in history. On the other, all the turmoil is clouding the outlook for what the Federal Reserve will do with interest rates after hiking them to market-rattling heights over the last year.

“Until these two clouds get resolved, it’s hard to see the market making any sustained headway,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

“I do think it’s something where it could calm down on its own,” Mr. Ma said about the crisis pounding the banking industry, “and I hope that it does. But it’s not clear why that would happen” without more forceful action from the government.

A day earlier, stocks fell sharply after the Federal Reserve indicated that while the end may be near for its hikes to interest rates, it still doesn’t expect to cut rates this year. Fed Chair Jerome Powell also insisted the Fed could keep raising rates if inflation stays high.

Traders on Thursday nevertheless were still largely betting the Fed will cut rates later this year. Such cuts can act like steroids for markets, juicing prices for stocks, bonds and other investments. They would relax the pressure on the banking industry and economy, but they could also give inflation more fuel.

Big technology and other high-growth stocks that tend to benefit the most from lower rates were among the strongest on Wall Street. Nvidia rose 2.7%, and Microsoft gained 2%.

Markets were also still mulling comments from Treasury Secretary Janet Yellen that may have helped drag down bank stocks on Tuesday.

She said the government is not considering blanket protections for all customers at all banks. That may have disappointed some investors hoping for a more comprehensive solution. But Ms. Yellen did say the government will make all depositors whole at banks on a case-by-case basis, when failing to do so would mean risk for the broader system.

Implicit in that is perhaps the hint that any bank failure could be seen as such a systemic risk. Failures at both Silicon Valley Bank and Signature Bank met that criteria. Depositors were promised all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.

Still, investors likely need to hear something more concrete to be sure, said Mr. Ma.

“The reality is that until there’s a belief that, at least in the near term, all deposits are protected, the economy remains at much greater risk than it needs to be,” he said

All told, the S&P 500 rose 11.75 points to 3,948.72. The Dow gained 75.14 to 32,105.25, and the Nasdaq climbed 117.44 to 11,787.40.

In the U.S. bond market, which has been home to some of Wall Street’s wildest moves this month, yields fell.

The yield on the two-year Treasury dropped to 3.81% from 3.97% late Wednesday. It was above 5% earlier this month.