U.S. stocks rebounded sharply Thursday, erasing two sessions of losses as crude oil retreated from its geopolitical spike and Treasury yields eased back below 5%, one day after the Federal Reserve delivered its first interest rate hike since 2023.
- The S&P 500 rose 1.1% to 7,635.21, while the Dow Jones Industrial Average lagged with a 0.7% advance, up 365 points to 51,827.04.
- The Nasdaq 100 outperformed, jumping 1.8% to 29,450.56.
- West Texas Intermediate fell 1.6% to $100.81 a barrel
- Brent dropped 2.5% to $103.23, a one-week low
Fed Chair Kevin Warsh and a unanimous FOMC lifted the fed funds target range by 25 basis points to 3.75%-4% on Wednesday and projected at least one further increase this year, citing inflation that remains too high at 3.4% and a labor market at effectively full employment.
Treasury Yields Retreat, Volatility Cools
The 10-year Treasury yield fell to 4.95%, down 8 basis points and back under the 5.04% level hit earlier this week, which had marked a 19-year high.
The policy-sensitive 2-year yield slipped 6 basis points to 4.69%, while the 30-year eased 7 basis points to 5.30%.
The CBOE Volatility Index slid 11.4% to 15.69, unwinding the fear premium built up around the Fed decision and the Middle East supply scare.
Gold was the standout in commodities, jumping 2.5% to $4,368.71 an ounce as real yields retreated, with silver surging 4.1% to $65.86.
On the macro front, initial jobless claims fell 10,000 to 196,000, well below the 206,500 consensus and close to July's 60-year low, while the Philadelphia Fed manufacturing index slowed to 37.8 from 47.4 but comfortably beat the 32.1 estimate.
Thursday's Performance In Major US Indices
According to the market data platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) gained 1.1%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 0.7%.
- The Invesco QQQ Trust (NASDAQ:QQQ) climbed 1.7%.
- The iShares Russell 2000 ETF (NYSE:IWM) advanced 1.0%.
Chip Rebound Powers Tech
The Technology Select Sector SPDR Fund (NYSE:XLK) was the clear leader, rising 2.2% as semiconductor names extended a rebound from Monday's AI-safety-driven selloff.
The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) followed with a 1.4% gain.
At the other end, the Communication Services Select Sector SPDR Fund (NYSE:XLC) fell 0.4% and the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) slipped 0.1%.
The Energy Select Sector SPDR Fund (NYSE:XLE) was flat despite the crude selloff, while the Materials Select Sector SPDR Fund (NYSE:XLB) and Utilities Select Sector SPDR Fund (NYSE:XLU) added 0.9% and 0.8%, respectively.
At the industry level, the Invesco Solar ETF (NYSE:TAN) led with a 4.1% jump and the Invesco WilderHill Clean Energy ETF (NYSE:PBW) rose 3.8%, both riding the same power-generation theme that dominated the tape.
The VanEck Gold Miners ETF (NYSE:GDX) climbed 3.6% alongside bullion, the SPDR S&P Metals & Mining ETF (NYSE:XME) added 3.1% and the VanEck Semiconductor ETF (NASDAQ:SMH) gained 2.6%.
The laggard was the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP), which ended the morning essentially flat.
The chip complex did the heavy lifting. Intel Corp. (NASDAQ:INTC) surged 9.7% on more than 77 million shares, nearly twice its normal pace, while Advanced Micro Devices Inc. (NASDAQ:AMD) rose 6.9%, Micron Technology Inc. (NASDAQ:MU) added 5.4% and Oracle Corp. (NYSE:ORCL) climbed 5.6%.
Super Micro Computer Inc. (NASDAQ:SMCI) jumped 8.8% and Hewlett Packard Enterprise Co. (NYSE:HPE) rose 8.0%.
Defense Names are the Session's Dead Weight
RTX Corp. (NYSE:RTX) fell 2.3%, Lockheed Martin Corp. (NYSE:LMT) dropped 1.9%, General Dynamics Corp. (NYSE:GD) slid 1.7% and The Boeing Company (NYSE:BA) lost 1.5%, a clean unwind of the Middle East risk premium.
On the earnings front, Lennar Corp. (NYSE:LEN) was the only major name to report after Wednesday's close, missing on both lines with adjusted EPS of $1.23 versus $1.29 consensus and revenue of $8.05 billion against $8.37 billion expected.
The homebuilder cut its full-year delivery guidance to 80,000-81,000 units from 82,000-83,000 and saw home-sales gross margin compress to 15.8% from 17.5%.
Shares fell roughly 1.5%, with the iShares U.S. Home Construction ETF (BATS:ITB) still managing a 0.9% gain.
The Day's Big Winners
Generac Holdings Inc. (NYSE:GNRC), up 20.1%, after disclosing Wednesday evening that it issued Amazon warrants for up to 1.69 million shares at $200.93 – roughly $340 million – tied to a backup-generator supply agreement for AWS data centers, with initial deliveries of about $2.4 billion across 2027 and 2028 and full warrant vesting at $8 billion of aggregate payments.
Vicor Corp. (NASDAQ:VICR) rallied 14.3% after announcing Wednesday it licensed its Vertical Power Delivery patent portfolio to an unnamed leading AI OEM on a non-exclusive basis, layering a royalty stream on top of product sales. The news follows a raised fiscal 2026 revenue outlook of more than $600 million and a 145% jump in backlog.
Tempus AI Inc. (NASDAQ:TEM) gained 13.7% following a Morgan Stanley note that quantified the company's reimbursement tailwind, with management pointing to roughly $80 million to $100 million of incremental revenue next year from xT pricing and $250 million to $300 million annually from xF approval and pricing.
Nuclear-adjacent power names Oklo Inc. (NYSE:OKLO) and X-Energy Inc. (NASDAQ:XE) rose 12.3% and 11.5%, respectively, with no company-specific news in the tape. Both appear to be trading in sympathy with the broader data-center power complex after the House passed the Ratepayer Protection Act 417-3 on Wednesday, shifting generation and transmission costs onto large data centers. X-Energy's most recent release, a Sept. 15 UK partnership with Centrica, was met with a nearly 4% decline that day.
Other notable gainers included IonQ Inc. (NYSE:IONQ), up 9.9%, SiTime Corp. (NASDAQ:SITM), up 8.7%, and Moderna Inc. (NASDAQ:MRNA), up 8.1%, as the iShares Biotechnology ETF (NASDAQ:IBB) added 2.2%.
On the Downside
AutoNation Inc. (NYSE:AN) dropped 3.9% after CFO Thomas Szlosek flagged third-quarter headwinds at the same Morgan Stanley conference, citing softer service growth, model-year changeover pressure, affordability and lower EV penetration following the expiration of federal incentives.
Further up the auto value chain, General Motors Co. (NYSE:GM) shrugged off the same read-across, rising 3.6%.
Reddit Inc. (NYSE:RDDT) slid 3.9%, extending losses after a Sept. 15 Wells Fargo note lowered confidence that the company can renegotiate its AI content-licensing agreement with Google on favorable terms.
Third-party data cited in recent sell-side work showed Google search traffic to Reddit down roughly 10% year-over-year so far in September, after a 7% decline in August.
Karman Holdings Inc. (NYSE:KRMN) rounded out the losers, down 3.8% consistent with the broader unwind in aerospace and defense as the Middle East risk premium deflated.
Elsewhere, T-Mobile US Inc. (NASDAQ:TMUS) fell 3.1% to lead S&P 100 decliners, weighing on the communications sector alongside Salesforce and Verizon.
Thursday's Russell 1000 Top Gainers
Thursday's Russell 1000 Top Losers
