Stocks Retrace Post-Fed Slide as Nasdaq 100 Jumps 1.73%

U.S. stocks rose on Thursday, Sept. 17, 2026, retracing the drop that followed the Federal Reserve's first interest-rate increase in three years, with the Nasdaq 100 tracker (QQQ) up 1.73% at $716.88 and the S&P 500 tracker (SPY) up 1.13% at $762.59 as of 16:27 GMT.

Two days after the Federal Reserve delivered its first interest-rate increase in three years, the flinch it caused in equities has largely been undone. U.S. stocks climbed on Thursday, with the biggest gains concentrated in the high-multiple technology names that had been the most sensitive to a higher policy rate, as investors reassessed whether one hike amounts to a turn in the cycle or a single adjustment.

As of the last trade at 16:27 GMT, the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) was at $762.59, up 1.13% from the prior close of $754.05. The Invesco QQQ Trust (NASDAQ: QQQ), which tracks the Nasdaq 100, was at $716.88, a gain of 1.73% from $704.72. The SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA: DIA) trailed both at $518.94, up 0.72% from $515.22.

The tape's leadership tells the story

The ranking of the three benchmarks is the most informative thing about Thursday's session. When a rate hike lands, the usual casualty is long-duration growth equity cc c cc c c c

That is because a higher discount rate weighs most heavily on companies whose profits sit furthest in the future. So when the Nasdaq 100 tracker outpaces the Dow tracker by a wide margin on the same day, it is a sign that the market is unwinding a rate scare rather than pricing a fresh one.

QQQ's 1.73% advance was more than double DIA's 0.72%, with SPY in between at 1.13% \u2014 a clean, orderly ordering by growth sensitivity. Both QQQ and SPY were trading near the upper end of their intraday ranges late in the session: QQQ's day range was $713.32 to $716.94, meaning the close-of-data price sat within a few cents of the high. SPY ranged between $759.96 and $763.41. DIA was the outlier, with a $516.55 to $520.67 range that left it below its intraday peak \u2014 a hint that the industrial and financial heavyweights in the index found less conviction as the day wore on.

What a retracement is, and is not

A retracement means prices have retraced part or all of a prior move \u2014 in this case the post-Fed decline. It does not mean the market has concluded the Fed is done. Investors shook off the jitters that followed the decision, as WSJ Markets reported, with lower oil prices and falling bond yields contributing to the improvement in mood.

The yield component matters as much as the equity component. Yields moving lower in the days after a hike suggests the bond market does not read the Fed's move as the opening act of a long tightening campaign. If it did, the front end and the belly of the curve would be repricing upward, not downward. Instead, the combination on Thursday \u2014 softer crude, easier yields, equities bid \u2014 is the pattern of a market that has decided the inflation impulse the Fed was responding to may be fading on its own.

Why cheaper oil does heavy lifting here

Energy costs sit upstream of almost everything the Fed watches. Falling crude feeds through to headline inflation directly via fuel, and indirectly via freight, plastics, fertiliser and airfares. A market that sees oil coming down has a cleaner path to arguing the central bank will not need to follow one hike with several more.

That is also why the relief showed up most in growth equities. Cheaper energy plus lower yields is a combination that lifts the present value of distant cash flows twice over \u2014 once through the discount rate, once through the margin outlook. The Dow's underperformance is consistent with that: a price-weighted index heavy in industrials and staples benefits less from a lower discount rate than from a stronger nominal growth outlook, and lower oil cuts both ways for the energy producers inside it.

The positions this leaves investors in

For anyone holding broad index funds, Thursday's move is a reminder that reflexive selling into a policy decision is expensive. The initial post-Fed drop has been substantially reversed within days, which is the characteristic behaviour of a market absorbing information rather than one repricing a regime.

That said, a single hike after three years without one changes the arithmetic on the margin for several groups:

Leveraged borrowers. Floating-rate debt reprices upward immediately, regardless of what the equity market does in the following 48 hours.
Savers and short-duration bond holders. A higher policy rate lifts the yield on cash-like instruments, though the decline in longer yields this week works the other way for anyone extending duration.
Rate-sensitive equity sectors. Housing-linked names, utilities and anything valued primarily on its dividend stream take their cue from the long end, which has been moving in their favour.
Dollar-exposed exporters. A hiking Fed typically supports the currency, which is a headwind to translated foreign earnings \u2014 a slow-burn effect that does not show up in a two-day retracement.

What to watch from here

The immediate question is whether the retracement completes. SPY and QQQ have both recovered to within reach of their intraday highs, which means the next few sessions will test whether buyers are willing to pay above the pre-Fed level or simply to fill the gap and stop.

Beyond price, three inputs will decide the next leg. First, the path of crude: the mood improvement this week rests partly on it, and a reversal in oil would take the inflation argument back to the Fed's side of the table. Second, the shape of the yield curve \u2014 if long yields resume climbing while the policy rate sits higher, the equity multiple compression that the market just avoided comes back into play. Third, the Fed's own communication. A hike delivered without a clear signal about what follows leaves the market to fill the gap, and this week it has chosen to fill it optimistically.

None of that is settled by one strong Thursday. But the internal structure of the session \u2014 growth over value, tech over industrials, yields lower alongside equities higher \u2014 is the signature of a market treating the Fed's move as a recalibration rather than the start of a squeeze.

Key facts

S&P 500 tracker (SPY): $762.59, +1.13%, as of 16:27 GMT Sept. 17, 2026
Nasdaq 100 tracker (QQQ): $716.88, +1.73%, prev close $704.72
Dow 30 tracker (DIA): $518.94, +0.72%, day range $516.55–$520.67
Policy backdrop: Federal Reserve's first rate hike in three years

Frequently asked questions

How much did U.S. stocks gain on Sept. 17, 2026?

As of the last trade at 16:27 GMT, the S&P 500 tracker SPY was up 1.13% at $762.59, the Nasdaq 100 tracker QQQ was up 1.73% at $716.88, and the Dow tracker DIA was up 0.72% at $518.94. All three gained, with technology-heavy QQQ leading and the Dow lagging.

Why did technology stocks lead the rebound?

Higher interest rates weigh most on companies whose profits arrive furthest in the future, because a higher discount rate reduces the present value of distant cash flows. When a rate scare unwinds, those same growth names recover fastest. That is why the Nasdaq 100 tracker rose 1.73% while the Dow tracker managed only 0.72%.

What does it mean that markets 'retraced' post-Fed moves?

A retracement means prices have reversed part or all of an earlier move. Here, stocks recovered the decline that followed the Federal Reserve's rate decision. It does not mean investors have concluded the Fed is finished raising rates — only that the initial defensive reaction has been unwound.

How did the bond market react?

Bond yields fell in the sessions after the hike, which contributed to the better tone in equities. Falling yields after a rate increase suggest the bond market does not expect a prolonged tightening campaign; if it did, yields would be repricing upward rather than easing back.

What role did oil prices play?

Lower oil prices helped lift market mood. Energy costs feed into headline inflation directly through fuel and indirectly through freight, plastics and airfares. Cheaper crude strengthens the case that the Fed will not need to follow one hike with several more, which supports both bonds and equity valuations.

What should investors watch next?

Three things: whether crude keeps falling, since the week's optimism partly rests on it; the shape of the yield curve, because rising long yields alongside a higher policy rate would compress equity multiples; and the Fed's guidance on what follows this hike, which the market is currently filling in optimistically.

Sources

U.S. Stocks Climb as Markets Retrace Post-Fed Moves — WSJ Markets

Photo: Sakaori (talk) · BY-SA 3.0 — source