The Nasdaq Composite jumped 1.59% on Thursday, leading a broad Wall Street rebound a day after the Federal Reserve's first rate hike under Chair Kevin Warsh triggered a selloff. Falling oil prices and retreating Treasury yields eased the pressure, while traders raised their odds of another hike in October.
The Nasdaq Composite rose 1.59% to 26,390.96 on Thursday, a day after the Federal Reserve's first interest rate hike under Chair Kevin Warsh triggered a broad selloff on Wall Street.
Indices erase Wednesday's losses
Wall Street's other gauges also erased Wednesday's losses: the S&P 500 gained 1.06% to 7,631.86, and the Dow Jones Industrial Average rose 0.61% to 51,778.04. The small-cap Russell 2000 added more than 1% to 2,891.45. Lower oil prices and bond yields supported the rally.
Rate-hike jitters ease, but October odds climb
Club portfolio director Jeff Marks said Wednesday's decline reflected worries about a second rate hike this year, though he cautioned against trying to predict future moves. Yet traders now see a near 51% chance of another increase when the Fed meets in October, up from about 44% a day earlier, according to CME's FedWatch. Still, the Fed has said additional hikes may be needed in the coming months to control inflation.
Oil and yields provide relief
West Texas Intermediate crude fell about 2% to $100.66 a barrel, and Brent crude dropped more than 2% to $103.43, oil's second straight daily decline. The 10-year Treasury yield retreated six basis points to 4.95%, after touching just over 5% on Tuesday, a 19-year high.
AI trade lifts chipmakers, Boeing extends its slide
Intel and Micron surged nearly 10% and more than 5%, respectively, even as OpenAI disclosed six additional instances of unexpected model behavior over the past six months. Elsewhere in the data center buildout, officials in Loudoun County, Virginia, voted to issue a 12-month pause on data center applications.
Boeing shares stayed modestly lower, extending Wednesday's 3.7% decline after the planemaker said stabilizing 737 Max production at 47 planes per month is taking longer than anticipated. Chief Financial Officer Jay Malave said free cash flow is now less likely to exceed the midpoint of the company's $1 billion to $3 billion outlook.
The Fed's warning of further hikes keeps both stocks and bonds primed for more volatility in the weeks ahead.
Sources: US Top News and Analysis, Investor's Business Daily, Economy News
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