U.S. equities rebounded Thursday after a U.S.-Iran deal eased tensions, overshadowing concerns over the Federal Reserve’s hawkish shift.
The S&P 500 rose 1.1% on Thursday, recovering from earlier losses as investor sentiment improved following a U.S.-Iran agreement. The Nasdaq Composite also advanced, though gains were tempered by lingering concerns over the Federal Reserve’s recent hawkish policy signals.
The rebound followed a sharp selloff earlier in the week, driven by the Fed’s indication of fewer rate cuts in 2024 than previously anticipated. Markets had struggled to balance optimism around artificial intelligence growth with macroeconomic uncertainty.
Trading volumes remained elevated as investors assessed the interplay between geopolitical developments and monetary policy expectations. The S&P 500’s weekly performance remained slightly negative despite Thursday’s gains.