Article by: Tide Research
On the first trading day after the Fed's rate hike, U.S. stocks quickly recovered. Oil prices retreated from their weekly highs, the 10-year U.S. Treasury yield fell back below 5%, and initial jobless claims unexpectedly dropped to 196,000—combined, these developments eased the tension from the previous day. The Nasdaq led the rally, with semiconductors and AI hardware driving the rebound, while crypto-related stocks also gained support from new regulatory guidelines. Although the rate hiking cycle has just restarted, market pricing now assigns over a 50% probability of another hike in October; last night’s rebound appeared more like a correction of yesterday’s concentrated sell-off.
The three major indices ended their three-day decline, with the Nasdaq-100 rebounding 3.12%.
The Dow Jones rose 0.62% to 51,779.85, the S&P 500 gained 1.14% to 7,637.74, and the Nasdaq advanced 1.69% to 26,418.30, ending a three-day losing streak. The VIX fell 12.82% to 15.44.
The Philadelphia Semiconductor Index rose 3.12% to 11,596.49. All seven major tech stocks closed higher: NVIDIA increased 2.54%, Amazon rose 2.13%, Microsoft gained 1.52%, Apple climbed 1.38%, Meta advanced 1.34%, Google rose 1.30%, and Tesla increased by approximately 1.2%. The Nasdaq Golden China Index rose 0.65% to 5,771.27.
The bond market has clearly rebounded. The 2-year U.S. Treasury yield fell to 4.671%, and the 10-year yield dropped to 4.939%. The U.S. Dollar Index edged down 0.03%.
WTI crude oil closed at $101.91 per barrel, and Brent crude oil closed at $104.82 per barrel. Spot gold rose to $4,342.63 per ounce. Bitcoin is around $76,500, and Ethereum is approximately $2,450.
Saudi Arabia increases transit supplies, pushing oil prices below $102
After the Fed's interest rate hike on Wednesday, long-term rates briefly surpassed 5%, and oil prices remained high. By Thursday, both pressures had eased.
Saudi Arabia has increased crude oil supplies routed through Oman and is working to restore the damaged pipeline, easing some supply concerns. Crude prices remain above $100, and while the situation in the Middle East has not fully stabilized, it did not further escalate inflation expectations today.
Last week, initial jobless claims in the U.S. fell to 196,000, the lowest level since mid-July, indicating a stable labor market. Meanwhile, the housing sector continues to be pressured by high interest rates: single-family home starts rose 7.6% in August, but building permits declined 1.8%; overall new home starts decreased 2.6%.
Expectations for further Fed rate hikes have not disappeared. The probability of another 25-basis-point hike in October, as priced in interest rate futures, has risen to 53.1%, up from 27.2% a week ago. The rebound in stocks and bonds last night was largely a recovery from the concentrated sell-off the previous day.
Chip stocks rebound collectively, with AI hardware regaining its position as the main theme.
Semiconductors were one of the strongest sectors last night.
Arm rose 8.6%, Intel rose 7.7%, AMD rose 6.5%, SanDisk rose 6.2%, Micron rose 5.5%, and Marvell rose 4.8%. After a sharp decline on Monday, AI hardware stocks have recovered much of their losses over the past several trading days.
There are also new order leads from the industrial sector. GlobalFoundries and Marvell are expanding their long-term collaboration to increase production capacity of silicon-germanium chips for high-speed optical connectivity in AI data centers, covering pluggable optical modules, near-package optics, and co-packaged optics. This partnership is significant because the expansion of AI data centers is shifting from mere GPU stacking to synchronized upgrades in interconnection technologies.
When viewed alongside the recent strength in optical communications, AI infrastructure investment is continuing to expand into interconnection segments. After increasing the number of GPUs, how to enable high-speed data transmission between chips and servers has become another bottleneck in data center expansion.
CoreWeave performed significantly weaker, with its stock price falling 4.2%. The company plans to issue $3 billion in convertible bonds and launch a stock financing program. While demand for AI computing power remains strong, the financing costs of companies with high capital expenditures continue to be priced separately by the market.
Beyond the chip sector, the cryptocurrency market also received a boost from new regulatory guidelines that day.
SEC lifts restriction on tokenized stock pilot, crypto-related stocks rise
The U.S. SEC has introduced a five-year exemption for tokenized stock trading, allowing qualified platforms to operate outside certain existing exchange and broker-dealer rules.
Circle rose 5.8%, Coinbase rose 5.8%, Robinhood rose 5.2%.
This new regulation covers tokenized securities that genuinely represent ownership of underlying stocks, ensuring investors still retain shareholder rights such as dividends and voting; synthetic tokens that merely track stock prices are not exempt. For exchanges and brokers, the exemption allows them to test the issuance, trading, and settlement processes for tokenized stocks within a compliant framework, without waiting for Congress to pass comprehensive cryptocurrency legislation.
Previously, the U.S. Senate failed to advance the Crypto Market Structure Act, putting pressure on the sector. This time, the SEC has directly provided a testing framework, opening a clearer path for tokenized stocks to be implemented in the U.S.
Today's Focus
Tonight, focus on the quarterly triple witching. Futures on stock indices, index options, and individual stock options all expire simultaneously, which may significantly increase trading volume and volatility in the closing session.
Tech stocks continue to focus on semiconductors and AI hardware. The Philadelphia Semiconductor Index has quickly recovered part of its early-week losses; today, the key focus is whether buying momentum can sustain and whether this rebound can expand from chips to areas like optical communications and storage.
The pricing in for an October rate hike has risen to 53.1%; the performance of U.S. Treasury yields near 5% will directly impact the valuation environment for tech stocks next week. If the 10-year yield continues to decline, the recovery potential for growth stocks will further expand; if it rises back above 5%, yesterday’s rebound may prove to be only a temporary correction.