Goldman results stir optimism in Wall Street

US stock indexes rose on Tuesday as strong results from Goldman Sachs calmed worries of a substantial hit to profit from accelerating interest rate hikes, but a rise in government bond yields pushed mega cap growth stocks lower.

Goldman Sachs Group gained 2.5% after reporting a smaller-than-expected drop in quarterly profit due to a slowdown in investment banking, which was cushioned by a boost in net interest income.

The investment bank, which is reorganizing its business into three units, wrapped up earnings from big US banks on a largely positive note, even though several lenders raised the loan loss provisions in anticipation of troubled times ahead.

“The markets are breathing a sigh of relief that earnings are coming in better than expected, particularly the banks and the financials, which have been very strong, especially versus expectations, but the Fed is still hiking.