US stocks rebound as oil prices fall and bond yields ease after Fed rate hike

New York: US stocks gained Thursday and recovering most of their losses for the week.

Falling oil prices and easing pressure from the bond market helped Wall Street reverse many of its moves from the prior day, when the Federal Reserve hiked its main interest rate for the first time in years and suggested more may be ahead as it tries to get the nation's high inflation under control.

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The S&P 500 climbed 1.1% and was on track for just its second rise in the last nine days. The Dow Jones Industrial Average was up 355 points, or 0.7%, as of 1:04 p.m. Eastern time, and the Nasdaq composite was 1.7% higher.

Stocks got a boost after the price for a barrel of Brent crude oil slid 1.4% to $104.38. That's down sharply from the nearly $110 it reached earlier in the week on worries that the war with Iran will keep oil bottled up in the Middle East instead of going to customers worldwide.

Brent is of course still much more expensive than the $72 per barrel that it cost earlier this summer, but Thursday's slide helped pull yields lower in the bond market and removed some pressure on stocks. The yield on the 10-year Treasury fell to 4.95% from 5.01% late Wednesday.

Higher yields make it more expensive for everyone to borrow money, from the U.S. government to people looking to buy houses to businesses wanting to build data centers. That in turn slows the economy.

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The Fed on Wednesday raised the short-term interest rate that it controls, the federal funds rate, by a quarter of a percentage point for its first hike in more than three years. Officials also indicated at least one more increase may be coming this year and that the Fed may then keep the federal funds rate high through next year.

The signals sent Wall Street on a roller coaster. Stocks initially held onto their gains from earlier in the day after the Fed made its announcement Wednesday. They then slid sharply before recovering a chunk of the losses before trading ended for the day.