U.S. stocks finished the day higher after the Fed's rate increase; chip stocks led the recovery. Falling oil and Treasury yields supported buying, but for this move to continue, relief in energy costs needs to persist.

We were watching whether the resilience in chips would spread to the broader market. More assets are now joining the rise; the main test is holding the reclaimed prices and how long companies can live with high costs.

Key takeaways

  • Rising stocks alongside a rate increase is not a contradiction. Share prices depend not only on today's rate but also on how many more increases may come and on expectations for company profits. One decision being behind us can reduce uncertainty; it does not mean that the whole tightening cycle is over.
  • The performance of the chip-company ETF SMH ($SMH) and the software-company ETF IGV needs to be tracked separately. The fact that both are part of technology does not mean they carry the same growth expectations or the same price risk.
  • Falling oil is positive for transport and production costs. But companies' purchases made at old prices and their fuel expenses do not change immediately, so relief in the stock market may not reach consumers at the same speed.

What happened?

  • Thursday's U.S. Treasury data showed the 10-year Treasury yield falling from 5.01% to 4.94%. A seven-basis-point decline supports the present value of future company profits. Yet borrowing costs remain high, so it is too early to read this as a return to cheap financing.
  • In Reuters' September 18 report, Brent fell to around $104 in early trading. Alternative shipping routes for Saudi oil are easing supply concerns; the pipeline repair timeline and attacks in the region remain uncertain.
  • Market commentator Tunç Şatıroğlu was more positive about SMH's bounce from support while remaining cautious about IGV. In his assessment, the rise needed to continue after the U.S. open; the price seen in the morning is not the same as the move across the full session.
  • Bora Özkent was watching Treasury yields fall and technology stocks recover after the Fed. The idea that further rate increases may be limited is a scenario; it should not be treated as a promise for the Fed's next meeting.

What changed since yesterday?

  • Yesterday's divergence was the broad index falling while chips stayed positive. On Thursday, SPY ($SPY), which tracks the S&P 500, rose about 1.14%, QQQ ($QQQ), which tracks the Nasdaq 100, rose 1.73%, and SMH rose 2.70%; IGV's gain stayed at 0.66%. The advance broadened, but software did not keep pace.

Market levels

U.S. stocks and Treasuries

  • SPY finished Thursday around $762.64. Reclaiming $760 now matters as nearby support; if the $770 resistance area is cleared, the recovery can progress. A return below $760 would show that the latest gains could not be held.
  • QQQ is around $716.89. It moved above the previous $712 threshold, with the $720 resistance area next. The new session's $713.32 low is a nearby support candidate, while $712 is the boundary to watch in a wider pullback.
  • SMH's close around $560.59 was above the previous $557 resistance area. If this area holds as support, $579 could come back into focus. The last session's $561.67 high is a nearby obstacle; losing $557 would widen the risk area toward the $540 support.
  • IGV rose to about $105.71, but could not hold above $106 during the session. The low around $104.18 is a support candidate; the conditions for a recovery toward the $108 resistance area will not be complete until $106 is reclaimed.
  • TLT ($TLT), which tracks U.S. Treasuries with maturities of more than 20 years, closed near the day's high at about $81.79. The $81.44 session low is a nearby support candidate; above it, the first requirement is to clear this resistance candidate. Staying above the old $81.56 boundary matters for the continuation of Treasury buying.

Precious metals and crypto

  • GLD ($GLD), which tracks gold, rose to about $398.38. The reclaimed $395.31 level can be watched as support, while the session high at $401.42 is nearby resistance. Clearing that high would matter for the continuation of the recovery in metals. Falling Treasury yields reduce the opportunity cost of holding this asset.
  • SLV ($SLV), which tracks silver, moved to about $58.96, above the old $58.73 resistance area. If this area holds as support, the session high around $59.75 is the next threshold; otherwise, the risk of a pullback toward $57.38 will rise again.
  • Bitcoin was around $77,313 this morning, above the previous $76,685 support boundary. The $81,853-$83,220 resistance area remains far away for a stronger recovery; reclaiming the first threshold does not mean that the wider area will also be cleared.
  • Ethereum is around $2,472. The move continues between the $2,380 support area and the $2,530-$2,576 resistance zone. For both crypto assets, holding above the critical area matters more than a single price.

Red flags

  • An offer or repair expectation that eases oil supply is not the same as shipments returning to normal. If new disruptions occur, inflation pressure through energy prices could strengthen again.
  • If buying in chips stops while the broad index falls back below the ground it reclaimed, confidence in the continuation of the rise will weaken. Especially after sharp moves, it is important to distinguish a level being exceeded briefly from holding above it.

Calendar

  • Today at 4:15 p.m. TRT: U.S. August industrial production and capacity utilization. We will watch how production strength and cost pressure move together.
  • Today: standard monthly options expiration in the U.S. The closing and reopening of positions may amplify intraday moves; expiration alone is not a directional forecast.

My analysis

I am more positive about the recovery than yesterday: the broad index reclaimed the ground it had lost, and Treasury buying accompanied the rise in stocks. Yet part of this move may reflect the release of pre-decision anxiety. For that reason, I am also accounting for the possibility of a short-lived reaction formed as selling pressure eased, rather than explaining the rise only through the strength of new buying.

From here, I will first watch whether chips hold their gains, then whether the broad index joins the move. If software lags, I will not carry the same optimism across all technology. If financing conditions ease while relief in energy costs continues, I can strengthen my view; if oil rises again and the Treasury yield returns to its previous high, I will assess today's recovery as more limited.

Sources

This is not investment advice; it is a research and monitoring note.