U.S. stocks rebounded on Thursday, with the S&P 500 advancing 1.2%, the Nasdaq Composite gaining 1.6%, and the Dow Jones Industrial Average rising 438 points following a sharp sell-off triggered by the Federal Reserve's latest policy meeting. The rally came as investors weighed a more hawkish interest-rate outlook revealed in the Fed's dot plot, which showed 9 of 18 officials expecting higher rates in 2026, while technology and semiconductor shares posted strong gains. The rebound followed Wednesday's Federal Reserve meeting where policymakers left interest rates unchanged but new Chairman Kevin Warsh emphasized restoring price stability and introduced a shorter policy statement alongside five new task forces.
Intel Leads Semiconductor Rally With 7% Surge on Trump-Apple Partnership
Intel emerged as one of Thursday's top performers, climbing 7% after President Donald Trump announced the company would partner with Apple to design chips in the United States. The development boosted sentiment across the semiconductor sector, with Nvidia gaining more than 1% and Micron Technology advancing around 6%. The iShares Semiconductor ETF (SOXX) jumped more than 5% as investors welcomed signs of strengthening domestic semiconductor investment. The gains helped offset concerns that emerged after the Federal Reserve's latest policy decision.
Fed Dot Plot Shows 9 Officials Expect Higher Rates in 2026
Wall Street experienced significant pressure on Wednesday following the Federal Reserve's first meeting under Chairman Kevin Warsh. While policymakers left interest rates unchanged, the updated dot plot showed 9 of the 18 Federal Reserve officials now expect interest rates to move higher in 2026. The projections marked a meaningful change in expectations and raised concerns that inflation remains a larger challenge than many investors had anticipated. Warsh drew attention after choosing not to submit his own rate forecast and repeatedly emphasized the importance of restoring price stability during the post-meeting press conference.
Chairman Warsh Introduces Shorter Policy Statement and Five Task Forces
Warsh's first meeting as Fed chairman signaled several changes from the central bank's approach under former Chairman Jerome Powell. The meeting introduced a shorter policy statement and unveiled five new task forces that could influence future Federal Reserve operations. According to Sonu Varghese, chief macro strategist at Carson Group, the central bank kept rates steady but delivered a more hawkish set of projections, reflecting ongoing inflation concerns. Divisions remain within the committee, as only about half of policymakers still project rate increases later this year.
FAQ
What caused U.S. stocks to rebound on Thursday?
U.S. stocks rebounded on Thursday as technology and semiconductor shares posted strong gains, offsetting concerns from the Federal Reserve's hawkish interest-rate outlook. Intel surged 7% on news of a Trump-announced partnership with Apple to design chips in the United States, lifting the broader semiconductor sector.
What did the Federal Reserve's dot plot reveal about interest rates?
The Federal Reserve's updated dot plot showed 9 of 18 officials now expect interest rates to move higher in 2026, marking a meaningful shift toward tighter monetary policy. The projections emerged from Chairman Kevin Warsh's first policy meeting, where rates were left unchanged but inflation concerns remained elevated.
