Traders work on the floor at the New York Stock Exchange in New York (AP Photo/Seth Wenig)

NEW YORK (AP) — Stocks are rising again this morning as a bit more fear evaporates from Wall Street.

The S&P 500 was 0.6 percent higher in early trading. It’s on pace for its fifth gain in the last six days, and its recent roll has it up for the month after struggling in earlier weeks on worries about whether the banking system was cracking under the weight of higher interest rates.

The Dow Jones Industrial Average was up 152 points, or 0.5 percent, at 32,870, as of 9:40 a.m. Eastern time, while the Nasdaq composite was 0.7 percent higher.

Forceful actions by regulators worldwide have helped build confidence that the current trouble for banks won’t torpedo the economy like the 2008 financial crisis did. Traders have also begun betting heavily that the Federal Reserve will have to cut interest rates soon. Such cuts could offer huge relief after a year of relentless hikes to rates, and they also tend to act like steroids for markets.

To be sure, all the recent ebullience has some professionals on Wall Street wary.

“Markets are pricing the best of both worlds: a recession that brings inflation down rapidly and keeps rates low, yet one where corporate earnings do not fall sharply,” according to analysts at Barclays led by Ajay Rajadhyaksha, global chairman of research.

They are skeptical and think both bonds and U.S. stocks look too expensive.

Since Silicon Valley Bank earlier this month became history’s second-biggest U.S. bank failure, Treasury yields in the bond market have tumbled as traders built bets the Federal Reserve would have to take it easier on interest rates.

The Fed has pulled its key overnight rate to a range of 4.75 percent to 5 percent, up from virtually zero at the start of last year, to drive down inflation. High rates can do that, but only by taking a blunt hammer to the entire economy. They also drag down prices for stocks and other investments.

The bet on Wall Street has been that the Fed may cut rates as soon as this summer, to release some of the pressure built up on the economy and banks. That has caused the price to soar and the yield to tumble for the two-year Treasury, which tends to move on expectations for Fed action.

Its yield plunged from above 5 percent earlier this month, when it was at its highest level since 2007, back below 3.60 percent last week. That’s a massive move for the bond market. It rose this morning to 4.15 percent from 4.11 percent late Wednesday.

Expectations for easier rates in turn have helped to buoy the Big Tech stocks that dominate the S&P 500 and other indexes. That’s because tech and high-growth stocks are seen as some of the biggest beneficiaries of low rates.

But many professionals on Wall Street are saying the Fed would likely cut rates only if a more serious recession for the economy were on the way, one that would pull down corporate earnings more sharply than what’s already expected.

The Fed has indicated it plans to raise rates one more time before holding steady through the end of this year. While it’s acknowledged that the turmoil for banks could almost act like a rate hike on its own, inflation is still too high for comfort.

“In sharp recessions – which seems to us the only way to justify bond market pricing, given how high US inflation is – corporate earnings easily drop 30-35 percent,” Rajadhyaksha and his Barclays colleagues wrote in a report. They added that Big Tech stocks would not be immune from such a downturn.

Nevertheless, the increasingly dominant force on Wall Street seems to be calm.

A measure of nervousness among stock investors on Wall Street this morning touched its lowest level since before a mad dash by Silicon Valley Bank customers earlier this month caused its failure and sparked the harsher scrutiny on banks globally.

Almost all of the financial stocks in the S&P 500 rose, as well as some of the banks recently seen as most at risk of seeing an exodus of depositors similar to Silicon Valley Bank’s.

A report this morning showed that slightly more U.S. workers applied for unemployment benefits last week than expected. That could be a sign of increased layoffs, but the number still remains very low compared with history.

In a separate report, the government revised down its estimate for how much the U.S. economy grew during the last three months of 2022. But it also still showed growth.

“Today’s data may have some investors more willing to see the light at the end of the tunnel for rate hikes but remember a multitude of data will be released before the Fed’s next decision,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

On Friday, the Commerce Department issues its February report on consumer spending. That’s the heart of the U.S. economy. Perhaps more importantly, the report will also give the latest update on the measure of inflation that Fed policymakers prefer to use.

“And we have just seen how quickly the market can be disrupted by unplanned turmoil,” Loewengart said, “so investors should remain alert.”