Fed Hike Steadies Equities; Micron Rises on Supply Constraints
US equities rebounded Thursday as the Federal Reserve's rate hike and softening oil prices eased inflation concerns, while sector-specific news drove gains in crypto and memory stocks.
US stocks closed higher on Thursday, reversing the post-Federal Reserve selloff seen Wednesday. The S&P 500 climbed 1.1%, the Dow Jones Industrial Average rose 0.7%, and the Nasdaq Composite jumped 1.6%. This recovery followed the Fed's first rate hike in three years, a 25-basis-point increase that markets interpreted as a credible commitment to containing inflation. The hawkish stance of Fed Chairman Kevin Warsh helped restore investor confidence, even as President Trump publicly criticized the decision and called for lower rates.
Energy prices provided additional support to risk assets. Brent crude settled near $104 per barrel, edging lower after US Energy Secretary Chris Wright indicated that Saudi Arabia's East-West pipeline would soon be restored. This pipeline serves as a critical alternative route for oil previously stuck in the Strait of Hormuz. The moderation in oil costs, combined with the Fed's action, reduced pressure on inflation expectations, allowing investors to re-enter equities after a day of volatility.
Crypto Leaders Pivot to Agency Regulation
Coinbase CEO Brian Armstrong announced a strategic shift in how the company approaches regulatory compliance following the Senate's failure to pass the Clarity Act. Armstrong described the legislative failure as an abdication of responsibility but framed it as a competitive advantage for Coinbase. He stated that the lack of a comprehensive federal framework means major financial institutions will not immediately integrate crypto assets, reducing potential competition. Coinbase will now pursue clarity through the SEC and CFTC rather than Congress.
This regulatory pivot coincided with a rise in digital asset prices, boosting related equities. Coinbase shares gained 4% on Thursday, while Robinhood and Strategy both advanced 4% and 3% respectively. The gains reflect investor optimism that the absence of a unifying federal law will allow established players like Coinbase to define the market standards in the near term, rather than facing immediate competition from diversified financial giants.
Memory Chipmaker Sees Tightening Supply
Micron Technology shares rose significantly after Intel CEO Pat Gelsinger warned that the memory chip bottleneck would worsen by 2027. This comment highlighted continued supply constraints in the semiconductor sector, a key driver for Micron's valuation. The remark underscored the persistent demand for high-bandwidth memory components, which remain critical for artificial intelligence infrastructure and data center expansions. Micron benefits directly from these structural supply issues, as competitors face production challenges.
JPMorgan CEO Supports Light Federal AI Oversight
JPMorgan Chase CEO Jamie Dimon voiced support for a federal, light-touch approach to regulating artificial intelligence. He argued that the current patchwork of state laws creates significant compliance hurdles for nationwide commerce. Dimon stated that differing state regulations make it almost impossible to manage AI-related business operations efficiently. He suggested that a uniform federal standard would be more effective than the fragmented legal landscape currently in place, aligning with JPMorgan's interest in streamlined operational costs.
