Markets

US Futures Rebound After Fed Hikes Rates to 4.00 Percent

By Markets Desk · 2026-09-17 · 1 min read

A wooden gavel resting on a polished desk surface — Illustration: Tradingbird

S&P 500 futures jumped 0.8 percent as traders digest the Federal Reserve's first rate increase in three years and a hawkish outlook on inflation.

S&P 500 futures rose 0.8 percent Thursday. Dow Jones Industrial Average futures gained 0.7 percent. Nasdaq futures climbed 1.1 percent. The Federal Reserve raised its benchmark interest rate by 25 basis points. The new target range is 3.75 to 4.00 percent. This is the first hike in three years. The Fed signaled a possible second hike to 4.1 percent in its quarterly projections. The move aims to control stubbornly high inflation.

US stock indices had declined immediately after the announcement. Markets are now recovering ground. The two-year Treasury yield slipped to 4.72 percent. The 10-year Treasury yield remained near 5.00 percent. Bond yields have stayed elevated due to energy shocks from the war in Iran. Investors also cite growing US national debt concerns. The US dollar fell to 155.64 yen from 156.26 yen. The euro rose to 1.1478 dollars from 1.1465 dollars.

Oil prices drop despite supply disruptions

Brent crude fell 2.2 percent to 103.48 dollars a barrel. US benchmark crude declined 1.7 percent to 100.65 dollars. Prices remain well above the 72 dollars per barrel seen in late February. Limited oil flows continue in the Strait of Hormuz. Saudi Arabia is repairing a key oil pipeline. This adds to supply pressure. GN auto markets/indices: market indices data shows these shifts in energy costs affecting broader economic outlooks.

European indices close higher

Britain's FTSE 100 rose 0.6 percent to 10,751.79. France's CAC 40 advanced 0.3 percent to 8,166.18. Germany's DAX climbed 0.5 percent to 25,667.03. Asian markets were mostly lower. Investors await weekly jobless claims data. Freddie Mac will report on average US mortgage rates. The 30-year fixed rate rose to 6.76 percent from 6.71 percent. This marks the third consecutive weekly increase.

Borrowing costs face upward pressure

Higher rates increase borrowing costs for consumers. Mortgage payments are already rising. Auto loan and credit card rates will follow. The Fed's hawkish turn signals sustained pressure on the economy. Markets are adjusting to the new interest rate environment. The focus remains on controlling inflation. Economic data releases will guide further moves.

Based on reporting by The Globe and Mail, compiled by the Tradingbird desk.