Dow rises 250 points as oil, Treasury yields fall after Fed sell-off

US stocks climbed on Thursday, September 17, as lower oil prices and Treasury yields boosted sentiment, with technology shares leading a rebound after Wall Street’s sell-off following the Federal Reserve’s interest rate decision.

The Dow Jones Industrial Average rose 250 points, or 0.5%, while the S&P 500 gained 1% and the Nasdaq Composite advanced 1.3%.

Technology stocks led the gains. Nvidia and Amazon rose about 2% each, while Microsoft gained 1%. Other stocks tied to the artificial intelligence trade also advanced, with Applied Materials, Qualcomm and Intel gaining about 2%, 4% and 3%, respectively.

Industrials also contributed to the advance, with Caterpillar rising more than 2%.

Treasury yields, oil prices fall

Treasury yields eased after rising in the previous session following the Fed’s decision. The 10-year Treasury yield fell more than 5 basis points to 4.949%, moving back below the closely watched 5% level.

Oil prices also declined, providing additional support to equities. US crude fell about 1% to around $100 a barrel, while Brent crude dropped 2% to roughly $102 a barrel.

Oil prices eased as concerns over supply disruptions moderated after Saudi Arabia reportedly decided to make additional crude cargoes available to Asian refiners through ship-to-ship transfers near Sohar port in Oman.

The gains on Thursday come after a sharp decline in the previous session. The Dow fell more than 630 points on Wednesday, while the S&P 500 and Nasdaq Composite also ended lower as investors assessed the Fed’s rate decision and outlook for borrowing costs.

US economic data

Investors also digested fresh economic data on Thursday. Initial jobless claims fell by 10,000 to a seasonally adjusted 196,000 in the week ended September 12, below the 207,000 expected in a Dow Jones survey.

Continuing claims, which are reported with a one-week lag, fell by 39,000 to 1.73 million.

Meanwhile, August housing data came in weaker, offering another indication of the impact of elevated borrowing costs on the US economy.

Dow futures climb 300 points as markets rebound after Fed rate decision

US stock futures rose on Thursday, September 17, as investors looked to recover some of the losses from the previous session, when equities came under pressure following the Federal Reserve’s interest rate decision

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Futures tied to the Dow Jones Industrial Average advanced around 0.7%, or roughly 379 points. S&P 500 futures gained 0.8%, while Nasdaq-100 futures climbed about 1.1%, pointing to a rebound in technology stocks after their decline on Wednesday.

Investor sentiment improved as traders assessed the Fed’s latest policy signals and Chair Kevin Warsh’s comments on inflation. The central bank raised its benchmark federal funds rate by 25 basis points on Wednesday, taking the target range to 3.75%-4%, and indicated that another rate increase could come this year.

Warsh said inflation remains too high, reinforcing the Fed’s focus on containing price pressures even as the central bank continues to assess the health of the economy.

Lower oil prices also supported sentiment on Thursday. US crude futures fell more than 1.5% to around $100 a barrel, while Brent crude declined more than 2% to $103.48 a barrel.

The gains in futures followed a sharp sell-off on Wall Street on Wednesday. The Dow fell more than 630 points, or 1.2%, weighed down by financial stocks. The S&P 500 declined 0.5%, while the Nasdaq Composite ended marginally lower.

Investors will now turn to a fresh batch of economic data for clues on the strength of the US economy and the outlook for monetary policy. Weekly jobless claims are due at 8:30 a.m. ET, while August housing starts will provide an indication of how elevated borrowing costs are affecting the housing market.

Asian markets were mixed on Thursday. Japan’s Nikkei 225 rose 0.33%, while South Korea’s Kospi ended little changed. China’s CSI 300 slipped 0.45%, while Australia’s S&P/ASX 200 gained 0.41%.

European equities moved higher in early trading, with the Stoxx 600 up around 0.5%. The UK’s FTSE 100 and Germany’s DAX also gained about 0.5%.

Also Read: Fed may hike rates one or two more times as inflation stays elevated: Yale's Todd Buchholz