Dow closes 320 points higher as US stocks rebound after rate hike

• Nasdaq led the rebound with a 1.66% gain, driven by tech and AI stocks: Intel surged 9%, while Nvidia, Amazon, and Qualcomm posted 2% gains
• The 10-year Treasury yield fell over 5 basis points to 4.945%, retreating below the 5% threshold hit after the Fed rate hike
• Markets now price a 53.1% probability of another 25-basis-point Fed rate hike in October, up from 27.2% a week earlier

Market Summary: US Stocks Rebound After Fed Rate Hike

Market Performance:

US equities posted strong gains on Thursday, recovering from losses following the Federal Reserve's first rate hike in three years. The Dow Jones Industrial Average rose 319.73 points (+0.61%) to 51,774.38, the S&P 500 gained 1.14% to 7,637.90, and the Nasdaq Composite advanced 1.66% to 26,410.50.

Key Drivers:

Technology stocks led the rally, with Apple and Amazon each gaining approximately 2% and Microsoft up 1%. AI-related stocks showed particular strength—Qualcomm rose 2% while Intel surged 9%. The 10-year Treasury yield fell below 5% to 4.945%, providing crucial support for equities. Oil prices declined with US crude dropping to around $101/barrel and Brent to $104/barrel, following reports of additional Saudi crude supplies to Asian refiners.

Sector Performance:

Strong gains were seen in semiconductors, gold and silver miners, and homebuilders following positive August data on housing starts and pending home sales. Crypto-linked stocks (Circle, Robinhood, Coinbase) rallied after the SEC introduced a five-year exemption for tokenized stock trading. Interest rate-sensitive bank stocks stabilized after Wednesday's 2.3% decline.

Fed Outlook:

Markets are now pricing a 53.1% probability of another 25-basis-point rate hike at the October Fed meeting, up from 27.2% a week earlier. Weekly jobless claims fell to near 1969 lows, indicating continued labor market resilience.

Market Implications:

The combination of falling yields, declining oil prices, and easing volatility (VIX at multi-week lows) suggests improving risk sentiment, though elevated oil prices and ongoing Middle East tensions remain concerns.