The S&P 500 Index ($SPX) (SPY) closed up by +1.14% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.61%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.73%. September E-mini S&P futures (ESU26) rose +1.10%, and September E-mini Nasdaq futures (NQU26) rose +1.67%.
Stock indexes settled sharply higher on Thursday as falling oil prices eased inflation concerns and knocked bond yields lower. WTI crude fell nearly -1% on Thursday amid signs that supply disruptions in the Middle East are set to ease, bolstering hopes that inflation can be kept under control. The 10-year T-note yield fell -7 bp to 4.94%. T-note yields also fell after the Fed’s +25 bp rate hike on Wednesday reassured investors that the Fed is determined to tame inflation.
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US economic news was mixed for stocks on Thursday after weekly jobless claims unexpectedly declined to an 8-week low and the Sep Philadelphia Fed business outlook survey fell less than expected. Also, Aug pending home sales unexpectedly rose. However, Aug housing starts and building permits fell more than expected.
US weekly initial unemployment claims unexpectedly fell -10,000 to an 8-week low of 196,000, showing a stronger labor market than expectations of an increase to 207,000.
US Aug housing starts unexpectedly fell -2.6% m/m to 1.275 million, weaker than expectations of an increase to 1.320 million. Aug building permits, a proxy for future construction, fell -2.7% m/m to 1.394 million, weaker than expectations of 1.408 million.
The US Sep Philadelphia Fed business outlook survey fell -9.6 to 37.8, stronger than expectations of 32.1.
US Aug pending home sales unexpectedly rose +0.3% m/m, stronger than expectations of a -0.1% m/m decline.
Oct WTI crude oil prices (CLV26) fell nearly -1% on Thursday on signs that Middle East supply disruptions are easing. On Wednesday, US Energy Secretary Wright said 18 million bbl of crude oil and refined products went through the Strait of Hormuz on Tuesday, easing global supply concerns. Also, Saudi Arabia said it seeks to return about half the capacity of the East-West pipeline within days following a shutdown last week because of drone strikes.
Crude prices earlier surged to a 3.75-month high on Tuesday as disruptions to Middle East supplies persisted. Last Friday, Saudi Arabia closed a major pipeline following attacks, disrupting a key route that bypasses the Strait of Hormuz. The East-West pipeline, which carries 7 million bpd of crude, was closed after threats from Houthi rebels. The pipeline moves oil away from the Persian Gulf toward the Red Sea, where it can be loaded on tankers. Saudi Arabia told OPEC last Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Markets are discounting a 53% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 closed up +0.90%. China's Shanghai Composite closed down -0.41%. Japan's Nikkei-225 Stock Average closed up +0.33%.
Interest Rates
December 10-year T-notes (ZNZ6) closed up by +12 ticks on Thursday. The 10-year T-note yield fell -8.6 bp to 4.937%. T-notes moved higher on Thursday as weakness in WTI crude oil prices eased inflation expectations. The 10-year breakeven inflation rate fell to a 4-week low of 2.303% on Thursday. T-notes also rose Thursday after the FOMC’s +25 bp interest rate hike on Wednesday bolstered confidence that Fed Chair Warsh will act to tame inflation, reinforcing the Fed’s credibility and independence.
Gains in T-notes were limited as Thursday’s sharp rally in stocks reduced safe-haven demand for government debt securities. Also, Thursday’s unexpected decline in weekly jobless claims to an 8-week low signals labor market strength that is hawkish for Fed policy.
European government bond yields moved lower on Thursday. The 10-year German bund yield fell -3.1 bp to 3.477%. The 10-year UK gilt yield fell to a 1-week low of 5.207% and finished down -7.4 bp to 5.222%.
Eurozone Aug CPI was revised lower to +3.2% y/y from the previously reported +3.3% y/y. Aug core CPI was left unrevised at +2.4% y/y.
As expected, the BOE kept its benchmark interest rate unchanged at 3.75% on Thursday. The vote was 6-3, and the BOE said that "there has been little evidence so far of material second-round effects in price and wage setting." The BOE also scrapped plans to sell long-dated gilts as part of its quantitative tightening program.
BOE Governor Andrew Bailey said the global energy shock has so far had a limited effect on prices and wages in the UK, "but the longer the volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise the Bank rate."
Markets are discounting a 54% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI stocks moved higher on Thursday, supporting gains in the broader market. The iShares Semiconductor ETF (SOXX) closed up more than +3%. Astera Labs (ALAB) closed up more than +9% to lead gainers in the Nasdaq 100, and ARM Holdings Plc (ARM) closed up more than +8%. Also, Intel (INTC) closed up more than +7%, and Advanced Micro Devices (AMD) and SanDisk (SNDK) closed up more than +6%. In addition, Micron Technology (MU) closed up more than +5%, and Marvell Technology (MRVL) and NXP Semiconductors NV (NXPI) closed up more than +4%. Finally, Broadcom (AVGO), Seagate Technology Holdings Plc (STX), and Qualcomm (QCOM) closed up more than +2%.
The Magnificent Seven technology stocks rallied Thursday, supporting the overall market. Tesla (TSLA), Nvidia (NVDA), and Amazon.com (AMZN) closed up more than +2%, and Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Apple (AAPL) closed up more than +1%
Telecom operators moved lower on Thursday. T-Mobile US (TMUS) closed down more than -5% to lead losers in the S&P 500 and Nasdaq 100, and Comcast (CMCSA) closed down more than -3%. Also, Verizon Communications (VZ) closed down more than -2%, and AT&T (T) and Charter Communications (CHTR) closed down more than -1%.
Vicor Corp. (VICR) closed up more than +19% after saying it has granted a non-exclusive Vertical Power Delivery license to a new original equipment manufacturer.
Generac Holdings (GNRC) closed up more than +18% to lead gainers in the S&P 500 after agreeing to supply up to $8 billion worth of generators for Amazon.com’s data centers and issuing a warrant to Amazon for a stake in the company.
Qiagen NV (QGEN) closed up more than +3% after Manager Magazin reported that TPG and Bain Capital are among potential bidders for the company.
Fluence Energy (FLNC) closed down more than -15% after cutting its full-year revenue forecast to $2.4 billion from a previous forecast of $2.9 billion to $3.1 billion, well below the consensus of $3 billion.
Paramount Skydance Corp. (PSKY) closed down more than -4% to lead losers in the S&P 500 after Barclays reinstated coverage on the stock with an underweight recommendation and a price target of $8.
CoreWeave (CRWV) closed down more than -3% after announcing the establishment of an at-the-market offering program under which it may offer up to 35 million shares of Class A common stock.
Earnings Reports (9/18/2026)
AnaptysBio Inc (ANAB) and Rezolute Inc (RZLT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.