US stocks are recovering after a day of fluctuation following the Federal Reserve's rate hike announcement. The S&P 500 gained 1.1%, while the Dow Jones and Nasdaq increased by 0.7% and 1.6% respectively, driven by falling oil prices and easing pressure from bond markets. In Australia, futures indicate a gain of 0.7% for the ASX at market open, following its modest rise on Thursday. The drop in Brent crude oil to $104.79 per barrel helped reduce yields in the bond market, with the 10-year Treasury yield falling from 5.01% to 4.95%.
Written locally by qwen2.5:14b on 2026-09-20,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
US stocks are rising and recovering most of their losses for the week.
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stocks → rise → 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.
uncertain
it → fall → control
The S&P 500 climbed 1.1 per cent and was on track for just its second rise in the last nine days.
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S&P → climb → days
The Australian sharemarket is set to rise, with futures at 4.57am AEST pointing to a gain of 57 points, or 0.7 per cent, at the open.
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futures → set → open
The ASX added 0.4 per cent on Thursday.
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ASX → add → Thursday
The Australian dollar was stronger at US71.11¢.
Stocks got a boost after the price for a barrel of Brent crude oil slid 1 per cent to $US104.79.
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price → get → US104.79
That’s down sharply from the nearly $US110 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.
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oil → ’ → customers
Brent is of course still much more expensive than the $US72 per barrel that it cost earlier this year, but Thursday’s slide helped pull yields lower in the bond market and removed some pressure on stocks.
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slide → cost → stocks
The yield on the 10-year Treasury fell to 4.95 per cent from 5.01 per cent late Wednesday.
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yield → fall → cent
Higher yields make it more expensive for everyone to borrow money, from the US government to people looking to buy houses to businesses wanting to build data centers.
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everyone → make → centers
That in turn slows the economy.
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That → slow → economy
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.
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it → raise → 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.
uncertain
Fed → indicate → year
The signals sent Wall Street on a roller coaster.
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signals → send → coaster
Stocks initially held onto their gains from earlier in the day after the Fed made its announcement Wednesday.
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Fed → hold → announcement
They then slid sharply before recovering a chunk of the losses before trading ended for the day.
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trading → slide → day
On the upside for markets, the shift to higher interest rates built confidence that the Fed is committed to getting inflation back to its target of 2 per cent.
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Fed → build → cent
Questions had begun to bubble in the summer about whether it would feel pressure from President Donald Trump, who is calling for lower interest rates.
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who → begin → rates
And the short-term cost of pain for the economy could be worth it if it gets inflation under control following years of staying too high.
uncertain
it → get → years
On the downside for markets, higher rates undercut prices for stocks and other investments.
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rates → undercut → stocks
When investors are earning more in interest from owning bonds, which are considered safer investments, they’re less willing to pay high prices for other kinds of investments.
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they → earn → investments
That’s beyond the effect higher rates have on slowing the economy in hopes of removing fuel for inflation.
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rates → ’ → inflation
Some reports on Thursday signalled the US economy may be strong enough to withstand higher interest rates.
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economy → signal → rates
One said fewer US workers applied for unemployment benefits last week.
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workers → say → benefits
Another said that manufacturing growth in the mid-Atlantic region was stronger than economists expected.
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economists → say → region
Fed Chairman Kevin Warsh said on Wednesday that a strengthening economy is one of the reasons Fed officials moved to raise interest rates after keeping them on hold earlier this year.
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officials → say → hold
He also cited “geopolitics,” along with the threat that increases in prices it’s causing could filter out and push up inflation elsewhere.
uncertain
it → cite → inflation
That’s likely a nod to the war with Iran and its effect on oil prices.
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That → ’ → prices
On Wall Street, stocks in the artificial-intelligence industry continued to rebound following their worldwide slide on Monday.
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stocks → continue → Monday
Nvidia climbed 2.6 per cent, and Advanced Micro Devices rose 6.5 per cent.
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Devices → climb → ?
That was even though OpenAI disclosed six more reports of “unexpected or concerning” behaviour in AI models.
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OpenAI → disclose → models
Leaders of the AI industry over the weekend called for a slowdown in development to address safety issues for humanity.
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Leaders → call → humanity
Stocks of several homebuilders also rose, even though a report showed the industry broke ground on fewer new homes last month than economists expected.
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economists → rise → homes
The housing industry has been one of the hardest hit by the climb for the 10-year Treasury’s yield, which topped 5 per cent this week for the first time since 2023 and has sent mortgage rates higher.
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which → hit → rates
Thursday’s ease in yields helped offer some support, and D.R. Horton rose 1.5 per cent, while PulteGroup added 0.8 per cent.
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PulteGroup → help → cent
Rival Lennar wavered throughout the day and was most recently down 0.1 per cent after reporting weaker profit and revenue for the latest quarter than analysts expected.
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analysts → waver → quarter
In stock markets abroad, indexes rose across much of Europe following a weaker finish in Asia.
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indexes → rise → Asia
London’s FTSE 100 rose 1.2 per cent after the Bank of England decided to keep its interest rates on hold.
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Bank → rise → hold
The Aporia
