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What is the story about?
US equities rebounded from the Fed-led sell-off on Thursday, September 17, owing to a combination of three important factors.
The Dow Jones gained 300 points and managed to recover half of its 600-point drop on Wednesday. The S&P 500 and Nasdaq were outperformers on Thursday, gaining 1.1% and 1.7% respectively.
Why Did The US Markets Rally On Thursday?
The rally on the S&P 500 and Nasdaq was led by tech stocks. Nvidia shares gained 2.5% on Thursday after CEO Jensen Huang said that the company will sell double the chips next year than what it has sold this year.
Other AI-linked names like Intel, Qualcomm, AMD, saw gains between 3% to 8%, contributing to the gains in the tech-heavy indices.
A fall in crude oil prices and bond yields cooling off also contributed to the positive sentiments on Wall Street.
Why Did Oil Prices Fall On Thursday?
Crude oil prices fell for the third day in a row on Thursday as supply side concerns eased and reports suggest that China privately asked Iran to rein in the Houthis in Saudi Arabia.
However, many analysts are still skeptical of prices easing further. JPMorgan went on to say that it has no base case for how to plan the end game of the Iran war. Global Risk Management also went on to say that while prices may have eased, supply risks still remain.
Additionally, Brent Crude futures have a strong support at $100 - $102 and technical analysts believe it will take a lot of negative newsflow for oil prices to push them below those levels.
Why Bond Yields Cooled Off On Thursday?
Bond yields across the globe cooled off on Thursday with the Fed event having played out and the rate hike being factored in.
The US 10-year yield is now down 10 basis points from levels of 5.04%, while the 30-year also cooled close to 10 basis points from the highs.
Traders have now established the Fed's inflation-fighting credibility after Wednesday's rate hike, and falling oil prices added to the sentiments.
Bond yields in the UK also cooled after the Bank of England kept rates unchanged and scrapped its plans to sell longer-dated bonds. The 30-year yield has now cooled over 20 basis points from the highs of close to 6%.
All eyes today are on the Bank of Japan and analysts have warned that while a 25 basis points rate hike is fully factored in, any disappointment in the commentary by governor Kazuo Ueda will lead to the Yen again weakening past the 160 mark against the US Dollar.
The Dow Jones gained 300 points and managed to recover half of its 600-point drop on Wednesday. The S&P 500 and Nasdaq were outperformers on Thursday, gaining 1.1% and 1.7% respectively.
Why Did The US Markets Rally On Thursday?
The rally on the S&P 500 and Nasdaq was led by tech stocks. Nvidia shares gained 2.5% on Thursday after CEO Jensen Huang said that the company will sell double the chips next year than what it has sold this year.
Other AI-linked names like Intel, Qualcomm, AMD, saw gains between 3% to 8%, contributing to the gains in the tech-heavy indices.
A fall in crude oil prices and bond yields cooling off also contributed to the positive sentiments on Wall Street.
Why Did Oil Prices Fall On Thursday?
Crude oil prices fell for the third day in a row on Thursday as supply side concerns eased and reports suggest that China privately asked Iran to rein in the Houthis in Saudi Arabia.
However, many analysts are still skeptical of prices easing further. JPMorgan went on to say that it has no base case for how to plan the end game of the Iran war. Global Risk Management also went on to say that while prices may have eased, supply risks still remain.
Additionally, Brent Crude futures have a strong support at $100 - $102 and technical analysts believe it will take a lot of negative newsflow for oil prices to push them below those levels.
Why Bond Yields Cooled Off On Thursday?
Bond yields across the globe cooled off on Thursday with the Fed event having played out and the rate hike being factored in.
The US 10-year yield is now down 10 basis points from levels of 5.04%, while the 30-year also cooled close to 10 basis points from the highs.
Traders have now established the Fed's inflation-fighting credibility after Wednesday's rate hike, and falling oil prices added to the sentiments.
Bond yields in the UK also cooled after the Bank of England kept rates unchanged and scrapped its plans to sell longer-dated bonds. The 30-year yield has now cooled over 20 basis points from the highs of close to 6%.
All eyes today are on the Bank of Japan and analysts have warned that while a 25 basis points rate hike is fully factored in, any disappointment in the commentary by governor Kazuo Ueda will lead to the Yen again weakening past the 160 mark against the US Dollar.
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