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Last updated: September 17, 2026. Editorial Team — researched using reporting from TheStreet, Bloomberg, and Yahoo Finance. See “Sources & Methodology” for our full source list.
Quick Answer
Major indices rebounded sharply Thursday, just one day after the Federal Reserve’s rate hike had triggered an initial selloff. The Nasdaq Composite jumped 1.6% and the S&P 500 gained 1.14% over the two-day stretch since the start of September, with technology leading the S&P 500’s sector performance at up 2.25%, while only two sectors, communication services (down 0.58%) and financials (down 0.09%), declined. Bloomberg’s coverage attributes the rebound directly to falling oil prices and declining Treasury yields, which together lent support to optimism that inflation can be kept under control even after the Fed’s first rate increase since 2023.
The Two-Day Whiplash, in Numbers
TheStreet’s live coverage of Wednesday’s session documented the initial reaction clearly: the Dow and S&P 500 plummeted after the Fed hiked rates and forecast further increases ahead. That selloff reversed dramatically by Thursday: TheStreet’s Thursday coverage shows the Nasdaq Composite jumping 1.6% not even 24 hours after the rate hike, with the index having made a modest overnight gap up even before the regular trading session began. That kind of rapid, two-day reversal, a hawkish-decision selloff followed by a sharp next-day rebound, illustrates just how quickly market sentiment can shift once a widely-anticipated but still uncertain event actually gets confirmed and absorbed.
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Why Falling Oil Prices Mattered So Much
Bloomberg’s coverage identifies the specific catalyst behind Thursday’s rebound directly: stocks joined bonds higher as falling oil prices lent support to optimism that inflation can be kept under control, a day after the Fed’s rate hike. Charles Schwab’s Thursday morning commentary adds the specific mechanism behind that oil price decline: crude fell on news of Saudi Arabia’s plans to get crude re-flowing, easing one of the key inflationary pressures that had been driving Fed rate-hike expectations throughout the preceding weeks. That’s a genuinely important causal chain worth understanding: the same energy-price dynamics that helped push the Fed toward Wednesday’s hike also, once they began reversing, helped fuel Thursday’s rebound — illustrating how tightly oil prices, inflation expectations, and Fed policy have been interconnected throughout this entire period.
Fed Chair Warsh’s “Sober” Framing, and the Market’s Own Read
Bloomberg’s coverage highlights a specific characterization of Wednesday’s decision worth understanding: Fed Chairman Warsh called the rate hike a “sober” decision, language suggesting a necessary, measured policy response rather than an enthusiastic tightening move. TheStreet’s Thursday coverage notes market strategist Julian Emanuel’s specific read on appropriate portfolio positioning following the decision, describing the case to “rebalance stocks, bonds ‘a little bit'” — a genuinely measured recommendation suggesting modest portfolio adjustment in response to the new rate environment, rather than a dramatic reallocation.
Individual Stock Standouts: Generac’s 20% Surge
Beyond the broad index-level rebound, Yahoo Finance’s Thursday midday coverage flags a specific, notable individual stock move: Generac soared 20% as part of the broader rebound from the post-Fed selloff. Yahoo Finance’s coverage attributes the overall market recovery to a combination of falling oil prices, lower Treasury yields, and increased confidence that the Fed is committed to curbing inflation — though it also cautions that investors should expect further volatility in the coming months, since disruptions to the oil supply, a key inflation driver, have not fully abated, and the full impact of recent calls from AI industry leaders for a slowdown in AI development remains genuinely uncertain.
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Technology’s Leadership Role in the Rebound
TheStreet’s data on Thursday’s sector-level performance shows technology leading the S&P 500’s rebound clearly, up 2.25%, with only communication services (down 0.58%) and financials (down 0.09%) declining among all eleven S&P sectors. That pattern, technology leading a broad market recovery while financials specifically lagged, is somewhat notable given that financial stocks often benefit directly from a higher-rate environment through wider lending margins — suggesting Thursday’s rebound was driven more by broad risk-on sentiment following the oil and yield declines, rather than a rotation specifically favoring rate-sensitive sector dynamics.
The Bigger Picture: A Month of Genuine Volatility
TheStreet’s own archive of daily market coverage through September illustrates just how volatile this entire month has been: from stocks sinking as the Fed meeting began and Treasury yields hit 19-year highs on September 15, to the initial post-hike plummet on September 16, to Thursday’s sharp rebound — a genuinely wide range of daily outcomes packed into a single week. That pattern is worth keeping in perspective: a single week’s dramatic swings, however striking in isolation, sit within a broader month that has included both a partial recovery earlier in September (when inflation and oil data came in better than feared) and this latest reversal, illustrating how much day-to-day market direction has been driven by a rapidly shifting combination of oil, yields, and Fed-related catalysts.
What This Volatility Pattern Suggests
- Markets can reverse sharply once genuine uncertainty resolves: The two-day swing from selloff to rebound illustrates how much of the initial negative reaction reflected the residual uncertainty of not yet knowing the Fed’s exact decision and framing, rather than the substance of the hike itself.
- Oil prices remain a genuinely critical variable to watch: Given how directly Thursday’s rebound traced back to falling crude prices, continued volatility in Middle East-related energy markets could keep producing outsized swings in either direction.
- Sector-level patterns don’t always follow textbook rate-sensitivity logic: Financials lagging even in a higher-rate environment suggests broader risk sentiment, not simple rate-sensitivity rotation, drove Thursday’s specific rebound.
Frequently Asked Questions
Why did stocks rebound so sharply the day after the Fed’s rate hike?
Falling oil prices, driven by Saudi Arabia’s plans to increase crude supply, combined with declining Treasury yields, restored investor optimism that inflation can be managed even after the Fed’s hike.
Which sectors led Thursday’s market rebound?
Technology led with a 2.25% gain, while only communication services and financials declined among the S&P 500’s eleven sectors.
What notable individual stock moves occurred during the rebound?
Generac surged 20% as part of the broader market recovery from the post-Fed selloff.
Is the market volatility expected to continue?
Yes. Analysts note oil supply disruptions haven’t fully abated and the full market impact of recent AI industry safety commentary remains uncertain, suggesting continued volatility ahead.
Sources & Methodology
This article draws on reporting from: TheStreet’s Stock Market Today coverage for September 16-17, 2026, including quoted commentary from strategist Julian Emanuel; Bloomberg’s live coverage of the post-Fed market reaction, including quoted commentary from Fed Chair Kevin Warsh; Charles Schwab’s September 17, 2026 market-open commentary; and Yahoo Finance’s September 17, 2026 midday market coverage. Figures and market levels reflect data as of this article’s last-updated date and change continuously during trading hours.
This article is for informational purposes and does not constitute financial or investment advice.
