US stocks experienced a significant surge on Wednesday following the Federal Reserve's decision to maintain current interest rates. The announcement, coupled with a rebound in technology stocks, led to notable gains in the market.
The S&P 500 index rose nearly 1.6%, while the tech-focused Nasdaq Composite saw an impressive increase of over 2.6%. The Dow Jones Industrial Average recorded a modest rise of 0.2%.
Federal Reserve Chair Jerome Powell's statement that a rate cut in September "could be on the table" provided further optimism. While no concrete decisions have been made regarding future meetings, Powell indicated that the economy is approaching a point where a reduction in policy rates may be warranted.
Technology stocks, which had recently faced declines, rebounded strongly. Initial earnings reports from major tech companies had raised concerns about the sustainability of the AI boom. However, positive developments, including an AI-driven earnings beat from AMD, boosted investor confidence. Nvidia shares jumped over 12%, recovering losses from the previous day's sharp decline. Morgan Stanley's recommendation of Nvidia as a "good entry point" after a 25% drop also contributed to the positive sentiment.
In commodities, oil prices spiked following geopolitical tensions arising from the killing of Hamas' political leader in an airstrike. Brent crude futures rose over 4%, surpassing $81 per barrel, while US West Intermediate crude futures climbed above $78 per barrel, marking similar gains.
Additionally, Meta stock saw an after-hours increase of more than 4% following its second-quarter earnings report, which exceeded Wall Street's expectations for both revenue and earnings per share.
This market rally highlights investor optimism driven by potential monetary policy changes and positive earnings reports in the tech sector.
