Oil eases and Treasury yields fall as tech leads Wall St. to a higher close
Wall Street rebounded on Thursday, as falling US Treasury yields, easing oil prices and solid labor data helped the markets to move past 'the Federal Reserve’s first interest rate increase in more than?three years.
The Nasdaq led a broad rally in the US stock market, which helped all three major US indexes close sharply higher.
Robert Pavlik is a senior portfolio manager with Dakota Wealth, based in Fairfield, Connecticut. He said that he was seeing interest in areas of the market which had been hard hit in anticipation of the Fed rate increase. "And people are sort of stepping up, doing a bit of buying when the market pulls back."
Crude oil prices fell to a new low after reports that Saudi oil was moving through Oman calmed supply disruption fears.
Energy prices have been soaring since the US-Israeli War against Iran began, contributing to global inflationary pressures.
Fed policy makers unanimously voted on Wednesday to increase the Fed funds rate?for the first since July 2023. In a statement, the central bank said that it was committed to achieving a "timelier" return to its 2% target inflation rate. This would allow for further tightening this year.
Ross Mayfield is an investment strategy analyst with Baird in Louisville, Kentucky. He said, "The market feels relieved by the Fed's consistency in voting the same way." "Fed chair Warsh reemphasized the Fed's independent."
According to CME’s FedWatch tool, financial markets now price in a 53.1% chance of another 25 basis-point rate increase at the Fed’s next meeting, scheduled for October. This is up from 27.2% one week ago.
Fed Chair Kevin Warsh said at his press conference Wednesday that the US is strong and maintaining price stability does not have to harm the job market. This view was supported by the Labor Department’s weekly report on jobless claims, which showed the initial claims dropping to near 1969 lows.
The CBOE Market Volatility Index (also known as "the fear Index"), which is often referred to as the "fear index", has reached its lowest level for over a week. This was in conjunction with lower crude oil prices.
When you have a long oil shock, the price of everything will start to rise. Mayfield said that it is the only significant headwind the global economy faces right now. "And in order to get any kind of relief or resolution, there is a wind behind the consumer, it's also a wind behind corporates and it allows Fed to be more hawkish."
The preliminary data shows that the S&P 500 rose 86.09, or 1.14% to 7,637.90, and the Nasdaq Composite grew 432.07, or 1.66% to 26,410.50. The Dow Jones Industrial Average increased by 319.73 or 0.61% to 51,774.38.
The gold and silver mining chips and coins were the top performers.
The housing data revealed that single-family housing sales and housing starts increased in the last month.
After Wednesday's 2,3% drop, interest rate-sensitive banks have stabilized.
The US Securities and Exchange Commission announced a five-year exclusion for tokenized stocks. Circle Internet Group, Robinhood, and Coinbase all closed in the green.
CoreWeave's stock fell after the company announced its plans to raise capital through convertible bonds and stock offerings.
Fluence Energy's shares fell after it lowered its revenue forecast for the fiscal year 2026.
(source: Reuters)
