U.S. equities rebounded sharply with the S&P 500 up 1.1% and Nasdaq gaining 1.9% after Fed-driven losses eased.
Wall Street’s main indexes closed higher Thursday as investors digested the Federal Reserve’s hawkish policy shift and geopolitical developments lifted sentiment. The S&P 500 rose 1.1%, while the Nasdaq Composite climbed 1.9%, recovering from earlier losses tied to Fed rate hike expectations.
The rebound followed a selloff triggered by the Fed’s updated projections, which signaled higher-for-longer interest rates. Prior to the session, futures markets had priced in elevated volatility, with the S&P 500 down nearly 1% in early trading. The Nasdaq, heavily weighted in tech, had underperformed in recent sessions amid rising Treasury yields.
Sentiment improved after reports of a potential U.S.-Iran agreement, further supporting the risk-on move. Major sectors participated in the rally, with technology and communication services leading gains.