U.S. stocks finished sharply higher Thursday as technology shares advanced, crude oil prices eased and Treasury yields declined a day after the Federal Reserve raised interest rates for the first time since 2023.
By yourNEWS Media Newsroom
NEW YORK — U.S. stocks climbed Thursday in a broad rebound led by technology companies as investors absorbed the Federal Reserve’s first interest rate increase in more than three years, while lower oil prices and Treasury yields helped ease some of the pressure that had weighed on markets.
The Nasdaq Composite led the major indexes higher, advancing 432.07 points, or 1.66%, to close at 26,410.50, according to preliminary data.
The S&P 500 gained 86.09 points, or 1.14%, finishing at 7,637.90, while the Dow Jones Industrial Average added 319.73 points, or 0.61%, to end at 51,774.38.
Technology shares were among the strongest performers as investors returned to portions of the market that had declined ahead of Wednesday’s Federal Reserve decision.
“We’re seeing interest in the areas of the market that have been hit hard in anticipation of this Fed rate hike,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “And people sort of stepping in, doing a little bit of buying on the pullback.”
Semiconductor stocks and gold and silver miners were among Thursday’s notable outperformers.
Crude oil prices also retreated, briefly reaching their lowest level in a week after reports that Saudi oil was moving through Oman reduced some concerns about disruptions to regional supplies.
Oil later recovered part of its decline as tensions in the Middle East persisted.
Energy prices have risen sharply since the beginning of the U.S.-Israeli war with Iran, adding to inflation pressures throughout the global economy.
The Federal Reserve on Wednesday unanimously approved an increase in its benchmark federal funds target rate, its first rate hike since July 2023.
The central bank said it remained committed to achieving a “timelier return” to its 2% inflation target, language that signaled policymakers could consider additional tightening later this year.
Investors appeared to take some reassurance from the unanimous vote and comments from Fed Chair Kevin Warsh following the meeting.
“The market is a bit relieved at the Fed’s coherence in that they all voted in the same way,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “Fed Chair Warsh re-emphasized the Fed’s independence.”
Financial markets on Thursday were pricing in a 53.1% probability that the Fed would raise rates another 25 basis points at its October meeting, according to CME’s FedWatch tool.
That was up substantially from 27.2% one week earlier.
Warsh said Wednesday that the U.S. economy remained strong and argued that restoring price stability did not necessarily require significant damage to the labor market.
Fresh employment data Thursday provided additional support for the Fed chairman’s assessment.
The Labor Department reported that initial applications for unemployment benefits declined to levels near lows last seen in 1969, signaling continued strength in the labor market.
Treasury yields moved lower despite the stronger labor figures, providing additional support to equities, particularly growth and technology stocks that can be sensitive to changes in borrowing costs.
Market volatility also subsided.
The CBOE Market Volatility Index, commonly known as Wall Street’s “fear index,” fell to its lowest level in more than a week as crude oil prices eased.
Mayfield said energy costs remain one of the most significant risks facing the economy because prolonged increases can spread into transportation, manufacturing and consumer prices.
“When you have an oil shock this lengthy, it’s bound to start to seep in prices all across the economy. It’s really the only major headwind facing the global economy right now,” Mayfield said.
“And to get any sort of relief or resolve there is a tailwind for consumers, it’s a tailwind for corporates, and it allows the Fed to be less hawkish.”
Housing-related shares also strengthened following economic data showing increases in single-family housing starts and pending home sales during the previous month.
Homebuilders moved higher on the reports.
Banks, which had dropped 2.3% Wednesday following the Fed announcement, stabilized during Thursday’s trading session.
Cryptocurrency-related companies also advanced after the U.S. Securities and Exchange Commission announced a five-year exemption involving tokenized stock trading.
Shares of Circle Internet Group, Robinhood and Coinbase all closed higher following the announcement.
Several individual companies moved sharply on corporate developments.
CoreWeave declined after announcing plans to raise additional capital through stock and convertible bond offerings.
Fluence Energy fell after cutting its revenue forecast for fiscal 2026.
Thursday’s advance marked a sharp change from the pressure that preceded the Federal Reserve’s decision, with investors returning to technology and other rate-sensitive areas as oil prices and Treasury yields moved lower.
Markets now face another Fed decision in October, with traders increasingly expecting policymakers could follow Wednesday’s increase with another quarter-point rate hike if inflation and economic conditions warrant additional tightening.
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