US equity indexes opened higher Thursday as declining oil prices and growing confidence in the Federal Reserve's monetary-policy independence offset lingering anxiety over a damaged Saudi Arabia pipeline. The Dow Jones Industrial rose 0.5 per cent to 51,700.34 in early trading, with the S&P 500 gaining 0.9 per cent to 7,621.98 and the Nasdaq 100 advancing 1.5 per cent to 29,384.40 — all bouncing back from Wednesday's losses following the Fed's first rate increase in three years.
By open the Dow was up 0.6 per cent at 51,750.70, the S&P 500 added 1.0 per cent to 7,625.05 and the Nasdaq climbed 1.3 per cent to 26,302.16. Futures had pointed to a firmer open, with broker IG pricing the Dow 1.3 per cent higher at 52,120 and the Nasdaq 100 1.7 per cent stronger ahead of the bell.
The Fed raised its benchmark rate by 25 basis points on Wednesday evening as expected, but investors were reassured by Chair Kevin Warsh's demonstrated commitment to fighting inflation and by the decision's unanimity. "The Fed is defending its credibility," said Michael Heise, chief economist at HQ Trust. Andreas Lipkow, chief analyst at CMC Markets, noted similar relief in European markets: "But the longer inflation stays elevated, the longer the Fed must keep its monetary reins tight — and the greater the risks to the economy."
Oil markets provided additional tailwinds, with prices retreating further and easing some inflation concerns. Investors were watching closely for news that a key Saudi Arabian pipeline could resume operations soon, though caution remained. "I wouldn't call it a green light yet," said Haris Khurshid, investment strategist at hedge fund Karobaar Capital. "The market would regain some capacity, but there's hardly any buffer for unforeseen outages."
As inflation worries receded, US Treasury yields drifted lower alongside rising bond prices. UBS strategists said they did not expect the Fed's move to derail equities, forecasting at least one additional rate increase but noting much of the tightening was already priced in. "Economic strength and solid corporate earnings make rising rates easier to absorb," they wrote.
Pre-market activity showed tech and artificial-intelligence names leading gains. Nvidia, Micron, Intel, Marvell Technology and SanDisk were trading 2.2 to 4.5 per cent higher. Among the Magnificent Seven all seven major tech names posted gains, including Amazon, which announced an $8 billion long-term supply agreement with Generac for data-centre backup generators. Generac's stock surged approximately 32 to 33 per cent pre-market; the deal also includes an option for Amazon to take a stake in Generac. Additional gainers included Hubbell, Brown & Brown and Iron Mountain, each up 4 to 5 per cent, while AI-linked names Vertiv, Marvell and Oracle also advanced.
In other pre-market movers, Nike rose 1.5 per cent after appointing Alexandre Arnault, deputy CEO of Moët Hennessy's wine and spirits division at LVMH, to its board of directors. Construction firm Lennar fell 2.5 per cent.
Swiss markets followed the US tone. The SMI gained 0.27 per cent to 13,906.75 by 11:30 local time, with the mid-cap SMIM up 0.96 per cent at 3,049.40 and the broad SPI adding 0.37 per cent to 19,630.16. ABB led SMI performers at +1.3 per cent, followed by Logitech, UBS and Novartis — each advancing roughly 1.2 per cent. UBS shares strengthened notably as the National Council continued deliberations on new equity-capital rules for systemically important banks with foreign holdings, a debate postponed until next week due to time constraints. Roche retreated 0.7 per cent, contrasting with Novartis's earlier strength.
European indexes also recovered on the Fed's measured approach. The German DAX rose about 0.5 per cent to 25,670 and the EuroStoxx 50 gained similarly to 6,304.
Experts said corporate earnings would once again become the primary driver of equity performance after the Fed's rate decision.
