The Dow Jones stock market roared back Thursday, recovering part of a brutal 631-point decline as falling oil prices and Treasury yields gave Wall Street some relief following the Federal Reserve’s first rate hike in more than three years.
The Dow Jones Industrial Average gained roughly 300 points, or 0.6%, in late-morning trading, while the S&P 500 climbed about 1.1%. The Nasdaq Composite led the rebound with a gain of roughly 1.6%.
The reversal came less than 24 hours after the Dow plunged 631.21 points, or 1.2%, to 51,461.90, its lowest close in three months.
Dow Jones Rebounds as Oil and Yields Fall
Two of Wall Street’s biggest recent pressure points eased Thursday: oil and Treasury yields.
The benchmark 10-year Treasury yield retreated below the psychologically important 5% level to around 4.95%, reducing some of the pressure that elevated borrowing costs have placed on stocks.
Oil also moved lower. Brent crude dropped more than 2% toward $103 a barrel, while U.S. West Texas Intermediate traded near $101.
Lower energy prices matter because the recent oil surge has complicated the inflation outlook, raising fears that the Fed could be forced to keep monetary policy tighter for longer.
Technology stocks responded strongly to the relief. Nvidia and Amazon gained more than 2%, while other semiconductor and AI-linked names also advanced.
Fed Rate Hike Still Hangs Over Wall Street
Wednesday’s selloff followed the Federal Reserve’s decision to raise its benchmark rate by 25 basis points to 3.75%–4.00%, its first increase since July 2023.
Fed officials also left the door open to additional tightening as inflation remains above the central bank’s target.
That possibility means Thursday’s rally does not eliminate the risks facing stocks.
Traders were pricing roughly a 51% chance of another rate increase in October, up from around 44% a day earlier, according to CME FedWatch data cited by Reuters.
The market is therefore caught between two forces: relief from falling oil and bond yields, and concern that another Fed hike could be coming.
For the Dow Jones stock market, the immediate test is whether Thursday’s rebound can develop into a sustained recovery rather than another short-lived bounce.
With oil still near $100, Treasury yields hovering around 5% and the Fed maintaining a hawkish stance, volatility is unlikely to disappear quickly.
But after Wednesday’s 631-point shock, Thursday’s rebound shows that investors are still willing to buy the dip when pressure from energy and bond markets eases.
