What happened

SVB Financial Group (SIVB.Q -36.36%) saw its stock price finish the day up 9.2% on Tuesday, after jumping as high as 11.2% in early afternoon trading.

All three major indexes were up today, led by the Nasdaq Composite, which gained 1.5%.

So what

There was a bit of volatility on the markets today, as a strong Producer Price Index (PPI) report for October spurred an early surge. The PPI was up 8% over the past 12 months, which was down from 8.5% in September. This beat economists' forecasts of an 8.3% gain in October. Also, the core PPI was at 6.7%, which was below the forecasted 7.2%.

But the market slowed after it was reported that missiles fired by Russia landed in eastern Poland and reportedly killed two people. It is not clear why they landed in Poland or what the response of NATO will be, as Poland is a NATO ally.

As for SVB Financial, the holding company for Silicon Valley Bank, it got a boost from a positive report from analyst Steven Alexopoulos with J.P. Morgan Securities (owned by JPMorgan Chase) after he met with SVB chief financial officer Dan Beck, The Fly reported. J.P. Morgan maintained an overweight rating and the $375 price target, which is a 55% increase over the current price. 

In a research note, Alexopoulos wrote that SVB's deposit outflows look manageable, and it has multiple liquidity sources available before it would even have to consider selling underwater securities. According to The Fly, the analyst said a better understanding of the bank's risk factors "should work to not only put a floor under the stock but also to eventually drive a material re-rating."

Now what

To put these comments in context, SVB Financial is a bank that caters to entrepreneurs in Silicon Valley and around the world, as well as the venture capital and private equity firms that fund them. Most of its deposits are in accounts that pay no interest,  which are often used by start-ups to deposit money from an investor. As a result, SVB typically generates higher net interest income because it doesn't pay out interest on these accounts.

But due to the economy and market environment, the amount of deposits shrank in the most recent quarter due to a combination of withdrawals and fewer deposits. So, as my Motley Fool colleague Rob Starks Jr. explained, SVB had to bring more interest-bearing accounts on the books, which, in turn, lowered its year-end estimates for net interest income. 

The good news is, average loans increased about 20% in the third quarter, year over year, to $71.1 billion. Also, private-equity term sheets (an intention to borrow) and new customer additions are at all-time highs, while credit quality is strong. Once the economic environment strengthens, SVB Financial will benefit from a lot of pent-up demand. It should definitely be on your radar.