US stock futures moved higher in premarket trading on Thursday, with technology stocks leading the gains. Dow Jones futures climbed 619 points, or 1.2%. S&P 500 futures gained 1.3%. Nasdaq-100 futures jumped 1.7%. The rise comes a day after Wall Street suffered losses following the Federal Reserve’s first interest-rate hike in three years, according to CNBC.
Tech stocks are driving the market higher
Technology stocks were among the biggest reasons behind Thursday’s rise in futures. Nvidia and Amazon, two members of the “Magnificent Seven,” gained about 2% each in premarket trading. Microsoft rose about 1%.
Other stocks linked to the artificial intelligence trade also climbed. Applied Materials, Qualcomm and Intel each gained about 3%, according to CNBC.
Dow futures are recovering after a big Wednesday fall
The futures rally is also helping Wall Street recover some of Wednesday’s losses. The Dow fell more than 630 points, or 1.2%, on Wednesday, with financial stocks weighing on the index. The S&P 500 dropped 0.5%. The tech-heavy Nasdaq Composite ended slightly lower. The losses came after the Fed raised its benchmark interest rate.
Also read: What does the Fed rate hike mean for Americans as phone and utility bills rise?
Fed raised rates by 25 basis points
The Federal Reserve increased the overnight federal funds rate by 0.25 percentage point. The target range is now 3.75% to 4%. Fed Chair Kevin Warsh said inflation remains too high. Fed policymakers also indicated that another rate hike could come later this year, according to CNBC.
Why are stocks rising despite the Fed hike?
Investors appeared to focus on the possibility of an economic recovery in stocks after Wednesday’s sell-off. Lower Treasury yields and falling oil prices also helped improve sentiment. Technology stocks, especially companies connected to AI and chips, led the premarket gains.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said his team remained positioned for further equity gains while preparing for near-term volatility, according to CNBC. Haefele said the rally could broaden across sectors and regions if monetary tightening remains measured, credit spreads stay stable and corporate profits continue to grow. He also recommended diversified equity exposure while warning against too much concentration in areas that are highly sensitive to interest rates or depend on a single source of returns.
10-year Treasury yield falls below 5%
Treasury yields moved lower on Thursday, giving another boost to stocks. The 10-year Treasury yield fell more than 5 basis points to 4.951%. It moved back below the important 5% level. The yield had climbed above 5% on Wednesday after the Fed’s rate decision, according to CNBC. Lower yields can help support stock valuations, particularly in parts of the technology sector.
Oil prices also fell
Oil prices dropped about 2%, adding to the positive mood in equities. US crude fell below $100 a barrel. Brent crude declined about 2% to around $102 a barrel. Concerns about supply disruptions eased after Saudi Arabia reportedly decided to make more crude cargoes available to Asian refiners. The additional supplies were reportedly being moved through ship-to-ship transfers near Sohar port in Oman, according to CNBC.
Also read: What is driving oil prices lower today? Saudi shipments ease supply fears as Brent stays above $100
US jobless claims came in below expectations
Fresh economic data also gave investors another reason to watch the market closely. Initial jobless claims fell by 10,000 to 196,000 for the week ending September 12. The figure was below the 207,000 expected by economists surveyed in the Dow Jones consensus. Continuing claims also fell by 39,000 to 1.73 million, according to the Labor Department. The data suggests the US labour market remained relatively strong during the week.
Housing data was weaker
Housing data released on Thursday showed a softer picture. Building permits fell 2.7% from July to 1.394 million in August. That was slightly below the 1.4 million estimate. Housing starts also declined 2.6% from the previous month to 1.275 million. Starts were below the forecast of 1.3 million, according to the CNBC.
Chip stocks are leading the premarket rally
Several semiconductor and technology-related stocks rose strongly before the market opened. Marvell Technology gained 4.5%. Lam Research rose 4%. Corning jumped 4%.
Memory-storage companies Seagate Technology and Western Digital gained about 3.5% each. The gains show that investors were again buying into parts of the technology and AI-related trade.
Generac shares jumped 33%
Generator maker Generac was one of the biggest premarket movers. Its shares surged 33% after the company announced a deal with Amazon to supply backup power generators for Amazon’s data centres. Initial deliveries are expected to total $2.4 billion between 2027 and 2028. Generac also gave Amazon the right to buy up to $340 million of its stock. Amazon shares were about 1.3% higher in premarket trading, according to CNBC.
Lennar shares fell after weak results
Homebuilder Lennar moved lower after reporting disappointing third-quarter results. Its shares fell about 1.2% before the opening bell. Lennar reported earnings of $1.19 per share, below the $1.28 expected by analysts surveyed by FactSet. Revenue was $8.05 billion, also below the $8.23 billion consensus estimate. The company’s earnings were also nearly half of what it reported during the same period last year.
Fluence Energy plunged after cutting guidance
Battery storage company Fluence Energy was another major premarket loser. Its shares fell 22% after the company lowered its full-year outlook. Fluence now expects $2.4 billion in 2026 revenue. That is below its earlier forecast of $2.9 billion to $3.1 billion. The company also expects a $200 million loss before interest, taxes, depreciation and amortization. Its previous outlook had ranged from a $30 million loss to $10 million in EBITDA, according to CNBC.
Citigroup cuts Boston Scientific rating
Citigroup downgraded medical-device maker Boston Scientific to neutral from buy. It also cut its price target to $50 from $57 per share. Citigroup pointed to stronger competition and slower-than-expected growth in the company’s main markets. The firm has lowered its estimates for Boston Scientific eight times this year, according to CNBC.
A cybersecurity breach in August has also created problems, with the company working to fulfil customer orders. Analysts believe management can deal with the problems, but Citigroup said it did not have a clear recovery path and preferred to step aside from the stock. Boston Scientific shares are down about 53% year to date.
What to watch when Wall Street opens
The main focus for investors will be whether the strong premarket gains continue after regular trading begins. Technology and AI-related stocks are leading the early move higher. Investors are also watching Treasury yields, oil prices and expectations for another Fed rate hike. The latest jobless claims and housing data will also add to the market’s reading of the US economy. The key question for Thursday’s session is whether investors can extend the rebound after Wednesday’s sharp sell-off.
