What happened

Mastercard (MA 2.73%) finished the day 3.7% higher on Tuesday after jumping as high as 4.6% just before noon ET. The stock is currently trading at $301.27, down 16% year to date.

The credit card giant rode the momentum of another strong day for stocks as the Dow Jones Industrial Average was up 825 points (2.8%), the S&P 500 was up 112 points (3.1%), and the Nasdaq was up 360 points (3.3%). It was the second straight day that the Dow topped 800 points.

So what

There were a few factors that drove the market higher on Tuesday and perhaps a catalyst that impacted Mastercard specifically.

As far as the overall market goes, banks and financial stocks may have surged higher on the news that the Reserve Bank of Australia increased its benchmark interest rate by 25 basis points instead the anticipated 50 basis points. Investors may be hoping that signals a similar lower-than-expected raise by the U.S. Federal Reserve.

Also, the U.S. Labor Department released its Job Openings and Labor Turnover Survey (JOLTS) report for August, which showed 10.1 million fewer job openings, which is less than the expected 11.2 million. It was the biggest drop in 2.5 years. Less hiring could be a sign that inflation is slowing down. While these are hopeful signs, it seems doubtful that the Fed will veer from its expected course at this point.

Also, Mastercard introduced a new product Tuesday, Crypto Secure, which seeks to improve security for digital transactions. The platform enables investors to better assess the risks of crypto exchanges and providers, among other features.

Now what

There was also some news from the Federal Reserve that, while it did not seem to move the stock on Tuesday, could have an impact down the road. The Fed finalized updates to its rule concerning debit card transactions.

The updates say debit card issuers should enable at least two payment networks to process all debit card transactions, including online payments. This could impact the two biggest networks, Visa and Mastercard, which handle the bulk of transactions. The new rule goes into effect on July 1, 2023.

Congress is also considering legislation that would put in place similar rules for credit transactions.

Analysts at Jefferies said the worst-case scenario for Visa related to the Fed rule would be a 3% EPS risk, reported The Fly.