US stock markets opened higher on Thursday, recovering from the steep losses seen the previous day following the Federal Reserve’s latest rate hike and economic outlook. The Nasdaq Composite surged by 1.2%, reaching above 19,600 as technology stocks, which had been hit hard by recent volatility, regained some of their momentum. Similarly, the Dow Jones Industrial Average jumped 1.1%, climbing to 42,787, as investor sentiment improved and buyers returned to the market after Wednesday’s sharp selloff.
The S&P 500 also saw a strong recovery, rising 1%, bringing it closer to the critical 6,000 threshold. This marks a positive shift following a period of uncertainty triggered by the Fed's cautious stance on rate cuts for next year, which had caused significant market turbulence.
Of the eleven sectoral indices, all but one showed gains. The energy sector led the charge, fueled by a rebound in oil prices. Energy stocks saw strong buying interest, reversing some of the previous day’s losses. The technology, healthcare, and consumer discretionary sectors also posted notable gains, contributing to the overall market rebound.
Investors appeared to regain confidence after the initial shock from the Fed’s projections, which had signaled a slower pace of rate cuts than many had hoped for in 2025. With inflation concerns still looming, the market was recalibrating expectations, leading to a more cautious approach. However, Thursday's positive performance suggests that investors were reassured by the broader economic fundamentals, as growth continues to outpace inflation expectations despite the Fed’s tightening policies.
The S&P 500’s climb towards the 6,000 mark represents a symbolic level for the index, as investors keep a close eye on whether the market can maintain its upward momentum in the face of potential challenges from rising interest rates and ongoing inflationary pressures.
Overall, Thursday's recovery showed that the market remains resilient, with investors carefully balancing optimism with the need for caution amid uncertain economic conditions. The coming days will likely provide further clues on whether the market can continue its recovery or if additional volatility lies ahead.
