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Nasdaq Closes Flat at 25,978.42 After Fed Hike

By Markets Desk · 2026-09-16 · 2 min read
A modern glass skyscraper reflecting a clear blue sky
Illustration: Tradingbird

The Nasdaq Composite ended the session nearly unchanged despite the Federal Reserve's first rate increase in three years.

The Nasdaq Composite closed at 25,978.42 on September 16, 2026. The index fell 3.15 points, a decline of 0.012%. This performance made it the most resilient of the major US benchmarks. The index opened at 26,108.46 and reached a high of 26,225.09. A sharp selloff followed the Federal Reserve's decision to raise rates. The index dropped to a low of 25,802.96. The total swing from peak to trough exceeded 400 points.

A late-session recovery erased the majority of the post-announcement decline. The final close left the index effectively unchanged from the previous day. This stability contrasts with the Dow Jones, which fell 1.21%. Investors rotated back into technology and AI-linked names. These stocks had faced heavy selling earlier in the week. The close places the Nasdaq within its 52-week range of 20,690.25 to 27,190.21.

Fed Raises Rates to 4 Percent

The Federal Open Market Committee voted unanimously to raise the target rate. The new range is 3.75% to 4.00%. This marks the first hike in three years. Markets had priced in this move with roughly 90% probability. Fed Chair Kevin Warsh cited robust productivity growth as a key factor. He noted that the labor market has kept pace with workforce growth. Warsh stated that inflation remains elevated above the 2% target.

The Fed's projections point to one additional hike before year-end. This signal initially triggered a broad selloff in equities. The impact on the Nasdaq was less persistent than on the Dow. Investors focused on stabilizing conditions within the technology sector. Many bought back into the dip during the afternoon session.

Chip Stocks Rebound on Intel News

The Nasdaq absorbed the fallout from a sharp selloff in AI stocks. This decline began Monday after comments from Anthropic CEO Dario Amodei. He called for a slower pace of frontier AI development. A researcher's public resignation over safety concerns added to the pressure. OpenAI also decided to delay its planned 2026 IPO. These factors drove down Nvidia, Broadcom, and other chip names.

Wednesday brought relief for the semiconductor sector. Reports emerged that SK Hynix is exploring a memory chip partnership with Intel. This potential deal in the United States boosted investor sentiment. Bank of America analysts described the AI infrastructure trade as constructive. They cited memory computing and power as primary bottlenecks. These constraints keep the AI build-out supply-constrained heading into 2027.

Software Outperforms Semiconductors Over Three Months

A clear rotation has emerged within the technology sector over the past quarter. Software stocks have outperformed semiconductor names by a wide margin. The iShares Expanded Tech-Software Sector ETF is up roughly 15%. It has gained more than 40% from its April lows. Microsoft and Palantir are both up around 30%. Salesforce has risen more than 50% since mid-June.

In contrast, the iShares Semiconductor ETF has fallen roughly 17% over the same period. Brian Mulberry, chief market strategist at Zacks Investment Management, said the narrative of software's decline is overstated. He noted that deploying AI tools for business operations is driving demand. This shift suggests a broader diversification of AI-related investments. The market is moving beyond pure hardware plays.

Based on reporting by bbntimes.com, compiled by the Tradingbird desk.

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