Technology and AI-linked stocks rebounded Thursday after the Federal Reserve raised rates, pushing the Nasdaq Composite up 1.69% while Nvidia and Amazon gained more than 2%.
Key Points:
- The Nasdaq Composite climbed 1.69%, leading gains across major U.S. indexes.
- Nvidia and Amazon rose more than 2% each as technology stocks recovered from the post-Fed selloff.
- Falling oil prices and Treasury yields helped investors move past the Fed's first rate hike since July 2023.
Nasdaq Tech Rally
Technology led Wall Street higher on Sept. 17, one session after the Federal Reserve unanimously raised its benchmark rate by 25 basis points, its first increase since July 2023, Reuters reported.
The Nasdaq Composite gained 439.87 points to 26,418.30, while the S&P 500 rose 1.14% and the Dow Jones Industrial Average added 0.62%. Nvidia and Amazon rose more than 2% each, helping lead a broad recovery in technology shares.
Chip stocks were among the strongest groups, with the Philadelphia semiconductor index advancing more than 3%. Lower crude prices and falling Treasury yields also helped ease pressure on growth stocks, which are sensitive to borrowing costs and long-term rate expectations.
Investors appeared willing to buy after the previous session's selloff. Robert Pavlik, senior portfolio manager at Dakota Wealth, said traders were “doing a little bit of buying on the pullback.”
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Fed Rate Outlook
The market also drew support from the Fed's unanimous decision and Kevin Warsh's message that price stability could be restored without damaging employment. Ross Mayfield, investment strategy analyst at Baird, said the “market is a bit relieved at the Fed's coherence.”
That relief did not remove expectations for more tightening. CME FedWatch data cited by Reuters showed markets pricing a 53.1% chance of another 25-basis-point increase in October, up from 27.2% a week earlier.
Crypto-linked equities also participated in the rally after the Securities and Exchange Commission announced a five-year exemption for tokenized stock trading. Circle Internet Group and Coinbase each rose 5.8%, while Robinhood gained 5.2%.
The rebound followed a sharp post-Fed decline on Wednesday, when investors initially focused on the prospect of additional tightening. The S&P 500 fell about 1% that day, while the Nasdaq lost roughly 0.7%, before lower yields and oil prices helped reverse part of the move Thursday.
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