US stocks staged a sharp recovery on Thursday, with the Dow Jones Industrial Average climbing 319.73 points, or 0.61%, to close at 51,774.38. The rebound came as Treasury yields and oil prices retreated, helping investors look past the previous session's losses triggered by the Federal Reserve's first interest-rate hike in three years.
The S&P 500 advanced 1.14% to 7,637.90, while the Nasdaq Composite outperformed with a 1.66% gain to 26,410.50. Technology shares led the rally, with Nvidia and Amazon each rising about 2% and Microsoft adding 1%. Semiconductor and AI-related names also posted strong gains, including Qualcomm (up 2%) and Intel (up 9%).
Tech and rate-sensitive sectors recover
The tech-led advance was broad, with homebuilders also moving higher after data showed single-family housing starts and pending home sales increased in August. Interest-rate-sensitive banks stabilized after falling 2.3% on Wednesday following the Fed's decision. Crypto-linked stocks, including Circle Internet Group, Robinhood, and Coinbase, closed higher after the SEC introduced a five-year exemption for tokenized stock trading.
Not all stocks participated in the rally. CoreWeave fell after announcing plans to raise capital through stock and convertible bond offerings, while Fluence Energy tumbled after lowering its fiscal 2026 revenue forecast.
Yields and oil ease pressure
The decline in Treasury yields provided additional support to equities. The 10-year Treasury yield fell more than five basis points to 4.945%, slipping back below the 5% threshold after rising above it following the Fed's decision. Oil prices also declined as concerns about Middle East supply disruptions eased. US crude slipped less than 1% to around $101 a barrel, while Brent crude fell 1% to about $104.
The oil retreat followed reports that Saudi Arabia had made additional crude cargoes available to Asian refiners through ship-to-ship transfers near Oman's Sohar port, helping to ease worries about disruptions to Saudi supplies. However, prices remained elevated amid ongoing regional tensions. The drop in crude also contributed to a decline in the CBOE Volatility Index, which reached its lowest level in more than a week.
Fed hike and market expectations
The rebound came a day after the Fed raised its benchmark rate by 25 basis points to a range of 3.75%-4%, its first increase since July 2023. Policymakers signaled that another hike could come later this year as they aim to bring inflation back to the 2% target. According to the CME FedWatch tool, markets now price a 53.1% probability of a 25-basis-point hike at the October meeting, up from 27.2% a week earlier.
Weekly US jobless claims fell to near their lowest levels since 1969, reinforcing the view that the labor market remains resilient. The combination of easing yields, softer oil, and solid economic data helped fuel Thursday's broad advance, though uncertainty about the Fed's next move persists.
This article is for informational purposes only and does not constitute financial advice.
