MARKET SNAPSHOT

U.S. stocks climbed and Treasury yields fell, as investors shook off the jitters that followed the Fed's first rate hike in three years. Oil prices declined amid optimism around Saudi Arabia's ability to restore some oil flows. Gold prices rose as the dollar weakened.

MARKET WRAPS EQUITIES

U.S. stocks recouped some of their recent losses as oil prices stabilized and confidence grew in the Federal Reserve's ability to contain inflation.

The Dow Jones Industrial Average rose 0.6%. The S&P 500 gained 1.1% and the tech-heavy Nasdaq Composite added 1.7%.

Some analysts attributed the turnaround to investors fine-tuning their reading of the Fed's hawkish tone. Some also credited oil prices, which fell on hopes that disruption to exports via a damaged Saudi pipeline may not be as severe as initially feared.

Earlier Thursday, Asian stocks were mixed, while government bond yields in the region erased earlier declines after the Federal Reserve delivered its first interest-rate increase in three years.

The Shanghai Composite Index lost 0.4% while the Shenzhen Composite Index slipped 0.2%. Hong Kong's Hang Seng index lost 0.4%.

South Korea's Kospi reversed early gains amid heavy foreign net selling to end the day flat.

Japan's Nikkei Stock Average added 0.3%, led by videogame and pharmaceutical stocks.

Stocks in Australia rose, as the S&P/ASX 200 gained 0.4%. New Zealand's S &P/NZX 50 gained 1.0%.

COMMODITIES

Oil prices fell for a second straight session amid expectations that Saudi Arabia could soon restore some oil flows through its damaged East-West pipeline while shipping crude through the Strait of Hormuz, easing immediate concerns over Middle Eastern supplies.

Brent crude futures settled down 1%, at $104.82 a barrel, and West Texas Intermediate slipped 0.5%, to $101.91 a barrel, adding to Wednesday's losses. The benchmarks ended well above their intraday lows.

"There's a lot of crosscurrents here," said David Russell, global head of market strategy at TradeStation.

Although there is clearly a supply shortage, "we're back to a spot where a clear bullish position on something like crude is no longer something that has a favorable risk-reward," Russell said.

"At this moment in time, the next $10 could be just as easily up or down," he added.

Precious metal futures settled higher in New York, recovering from a swoon in the wake of yesterday's Federal Reserve interest-rate increase.

"My sense is that they will lag while we're in a rate-hiking cycle, and right now we're fairly clearly in a rate-hiking cycle," said David Russell, global head of market strategy at TradeStation.

There are a lot of arguments in favor of gold, in terms of central bank buying and an alternative to the dollar, but the current macro environment "is not in any way textbook favorable for gold and silver," he added.

Front-month gold settled up 0.3% to $4,360.20 a troy ounce, and silver rose 1.8% to $65.47 a troy ounce.

TODAY'S TOP HEADLINES

U.S. Treasury Yields Fall as Fed Regains Trust, BOE Leaves Rates Unchanged

Bond yields declined as markets reacted to central-bank moves and oil prices slipped.

The Bank of England kept its policy rate unchanged at 3.75%, as expected. The decision came after the U.S. Federal Reserve's well-anticipated quarter-point interest-rate hike, which brought the fed funds target rate range to 3.75%-4.00% in a unanimous vote Wednesday. Fed officials indicated another rate increase could happen this year, although Chairman Kevin Warsh was noncommittal. Investors approved of the resolve to fight inflation.

"The unanimous Federal Open Market Committee vote says more than the 25-basis-point hike itself," Natalia Lojevsky, managing director of CIFC Asset Management, said in a note.

Mortgage Rates Hit 6.95% in Biggest Weekly Jump Since April 2025. Don't Expect a Big Reversal Soon.

Mortgage rates this week rose to just under 7% in their greatest one-week gain since April 2025, according to one closely watched weekly average.

Freddie Mac's average 30-year fixed mortgage rate during the week ended Sept. 16 was 6.95%, up from 6.76% one week prior. Other gauges, such as those published by Mortgage News Daily and Bankrate, have surpassed 7%.

The rise in mortgage rates has weighed on real estate stocks. The iShares U.S. Home Construction exchange-traded fund is down 0.9% this week, on track for its sixth straight down week, according to Dow Jones Market Data.

Microsoft Is Preaching AI Transformation, Starting With Itself

Artificial intelligence has turned software development at Microsoft upside down, and the changes reflect how technology is accelerating a wholesale reconsideration of the way the entire company functions.

On Thursday, Microsoft is releasing a playbook detailing how it is navigating the AI upheaval. It includes lessons that employees like Julia Gao, a 23-year-old software engineer, have had to learn quickly as their roles have radically changed in a matter of months.

"When I first joined Microsoft last year, we were using AI, but it wasn't to the extent that we are now. I was still writing code by myself," Gao told me last week over lunch at Microsoft headquarters in Redmond, Wash.

Huawei's Plan to Become China's Nvidia

Huawei Technologies is ramping up development of alternatives to Nvidia's artificial-intelligence computing systems, part of China's push to reduce reliance on U.S. technology.

The Chinese company said Thursday it would release two new AI chips next year. It said it has shipped more than 1,000 of its AI-computing systems-which bundle hundreds of chips to boost computing power-to more than 370 customers.

For its computing and communications business, "Huawei's goal is to become Nvidia," Guo Ping, chairman of Huawei's supervisory board, told new employees recently, according to an official transcript.

GM to Produce Patriot Missile Parts as U.S. Faces Critical Arms Shortage

General Motors has entered the missile business.

The automaker is supplying parts for Lockheed Martin's Patriot missiles, the military contractor said Thursday-a potential lift to U.S. munitions supplies depleted by the conflicts in Ukraine and the Middle East.

Lockheed, which faces Pentagon demands to sharply boost munitions production, said GM delivered an initial batch of missile-housing components for PAC-3 MSE interceptors in August.

Expected Major Events for Friday 04:00/MAL: Aug External Trade

04:00/MAL: Aug CPI

07:30/THA: Weekly International Reserves

08:59/JPN: Japan Monetary Policy Meeting decision

09:59/CHN: Aug FDI Foreign Direct Investment

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