US stocks bounced back on Thursday following a significant downturn, showcasing a recovery after experiencing one of the worst sell-offs in months across major indexes.
At the market’s opening, the S&P 500 surged approximately 0.8%, marking a strong return from its most considerable single-day drop since October. Similarly, the Dow Jones Industrial Average increased by 0.7%, while the Nasdaq Composite, known for its technology-heavy composition, saw a 1.2% rise after both indexes ended nine consecutive days of gains.
Some investors had warned of an impending pullback in stocks, given the extensive rally largely driven by expectations of a shift in Federal Reserve policy towards interest rate cuts, potentially as early as March.
Despite resistance from central bank officials, the market held onto this expectation, sustaining stock prices until the abrupt pause in the rally on Wednesday.
The specific cause behind Wednesday’s notable decline was unclear, with various theories emerging among commentators. Speculations ranged from concerns about the US economy, triggered by FedEx’s pessimistic revenue forecast, to year-end profit-taking and even discussions around zero-day options trading.
In individual stock movements, Micron Technology experienced a notable surge of over 8% early Thursday following its second-quarter revenue forecast that surpassed Wall Street’s predictions. This optimistic outlook signals a potential revival for the memory chip sector, which had been struggling amid significant price declines.