Closing Bell: Stocks Reverse Declines Post Fed Rate Hike

U.S. stocks rallied on Thursday, supported by a drop in Treasury yields and oil prices. 

The S&P 500 (SPX) climbed 1.14%, while the Nasdaq-100 (NDX) jumped 1.73%. The Dow Jones Industrial Average ($DJI) was up 0.61% and the small-cap Russell 2000 (RUT) rose 0.55%. Tech supported the rally with chip stocks leading the way. The Philadelphia Semiconductor Index (SOX) jumped 3.14% led by a 7.7% rally in Intel (INTC) and a more than 6% gain in Advanced Micro Devices (AMD) shares. Magnificent Seven names were all sharply higher with Nvidia (NVDA), Tesla (TSLA), and Amazon (AMZN) up more than 2% each. 

U.S. oil prices fell more than 1% to near $101 a barrel. Saudi Arabia, along with other oil producers, is pushing to export more crude through the Strait of Hormuz as it works to reopen its damaged East-West pipeline, according to a MarketWatch report. Yields also fell on Thursday with the benchmark 10-year Treasury yield falling 6 basis points to settle below 4.95%. 

With conflict in Iran and sticky inflation, the unanimity of the FOMC decision shows this is not just a one-and-done interest rate increase, and this can weigh on stocks and the bond market, says Marta Norton, Chief Investment Strategist at Empower. See The Fed's Credibility Fight and Where to Invest Now | Market On Close 

Three things to watch from Thursday’s market action: 

Shares of Generac (GNRC) surged more than 18% after the maker of backup power generators said it signed a major long-term supply agreement with Amazon.com (AMZN) to provide backup power generators for data centers. The agreement calls for $2.4 billion in initial generator deliveries in 2027 and 2028, according to a regulatory filing. See Ca$htag$: AMZN Cloud Growth Lags Behind MSFT, 'Their Game to Lose'  

Nvidia CEO Jensen Huang said the company expects to sell twice as many chips next year compared to this year, according to reports. Meanwhile, Nebius Group (NBIS) is set to raise its on-demand cloud pricing for Nvidia GPUs by 17% to 21% starting October 1, according to reports. Nvidia shares were up 2.54% Thursday. See RoboStrategy (BOT) CEO on Autonomous Robot Growth, NVDA & Making AI Investments 

Bernstein downgraded Palo Alto Networks (PANW), Okta (OKTA), and SentinelOne (S) from Outperform to Market Perform, but raised its price targets. Shares of Palo Alto slipped 0.16%, but Okta and SentinelOne were essentially flat on the day. The downgrade was one of many on Thursday. For a short list of upgrades and downgrades, see Thursday’s Morning Watchlist and subscribe: U.S. Stock Futures Rebound After Fed Selloff | U.S. Stock Futures Rebound After Fed Selloff  

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