Wall Street rebounded Thursday as a technology-led rally erased Wednesday's losses triggered by the Federal Reserve's hawkish signal.
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S&P 500 rises 1.1% to 7,500 as tech rally defies Fed
Wall Street rebounded Thursday as a technology-led rally erased Wednesday's losses triggered by the Federal Reserve's hawkish signal.
The S&P 500 climbed 1.1% to 7,500.58 on Thursday, erasing the prior session's losses as a surge in technology stocks overwhelmed concerns about a potential Fed rate hike.
"While investors are welcoming the agreement as a constructive step for geopolitical risk, uncertainty remains elevated around potential flare-ups," said Adam Turnquist, chief technical strategist at LPL Financial.
The Nasdaq Composite surged 496.28 points, or 1.9%, to 26,517.93, while the Dow Jones Industrial Average added 72.15 points, or 0.1%, to 51,564.70. Intel jumped 10.6% after President Donald Trump announced the chipmaker will produce semiconductors for Apple in the U.S. Nvidia rose 3% and Micron Technology gained 8.7%. The 10-year Treasury yield eased to 4.45% from 4.49%, reducing pressure on growth-dependent stocks.
The rally shows investors are prioritizing strong corporate fundamentals over the central bank's hawkish pivot. The Fed held its benchmark rate steady at its two-day meeting that ended Wednesday but indicated it may raise rates at least once by December, according to the Summary of Economic Projections.
Airlines and cruise operators also advanced, with American Airlines rising 3.7%, United Airlines adding 2.1% and Carnival climbing 3.2%. Energy stocks lagged as oil prices wavered after the U.S. and Iran signed an agreement to end their war and reopen the Strait of Hormuz. Exxon Mobil fell 2.1% and Chevron dropped 2.2%. Brent crude settled 0.4% higher at $79.85 a barrel, while U.S. benchmark crude slipped 0.2% to $75.85.
SpaceX fell 3.6%, extending its decline since its stock market debut last week. The Elon Musk-led rocket maker and AI company had dropped 4.9% on Wednesday.
The yield on the 2-year Treasury, which more closely tracks Fed policy expectations, fell to 4.18% from 4.20%. The VIX declined alongside bond yields as the initial shock from the Fed's hawkish signal faded.
"This shift in the risk distribution helps explain why around half of the committee thought that an interest-rate hike this year might be needed," said James McCann, senior economist at Edward Jones.
U.S. markets will be closed Friday for Juneteenth.
This article is for informational purposes only and does not constitute investment advice.
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