Stocks rise as Wall Street bounces back from Fed sell-off; oil dips

Stocks climbed Thursday morning as Wall Street tried to bounce back from a steep sell-off the previous day, after the Federal Reserve issued its first interest-rate hike in three years. The Dow Jones Industrial Average jumped 305 points, or 0.6%, by about 9:40 a.m.ET, while the S&P 500 and Nasdaq rose 1% and 1.3%, respectively.Long-term Treasury yields eased slightly after the Fed decision, following a rapid run-up over the past few weeks as traders feared officials were waiting too long to act on inflation.

The US 10-year Treasury yield dipped to 4.951%, while the 30-year yield eased to 5.309%.Bob Edwards, chief investment officer at Edwards Asset Management, said stocks are rising and Treasury yields are easing because the Fed’s meeting cleared up some uncertainty. “Stocks have the clarity needed from the Federal Reserve to resume their rally as the market’s wall of worry continues,” he said in a Thursday note. “Wednesday’s rate hike was already priced into the markets since bond yields have been rising and stocks have been declining in recent weeks.”Oil prices dipped on Thursday, though they still remained near the $100 level.Brent crude oil prices fell 2.6% to $103.30 a barrel while West Texas Intermediate slid 1.8% to $100.55 a barrel.Investors had largely been expecting the Fed to hike interest rates by a quarter point in an attempt to tackle stubborn inflation.

But the Fed rarely issues standalone rate movements, and the real market mover was its forecast for more rate hikes this year.On Wednesday, the Dow fell more than 630 points, or 1.2%, while the S&P 500 dropped 0.5%.The Nasdaq ended the session just slightly in the red.The committee’s dot plot showed 12 of 18 officials expect one more rate hike this year and four anticipate two more rate hikes.

Just two predicted no more rate hikes.Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.

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