Sunday, September 20

Technology shares drove a broad U.S. rebound, with the Nasdaq Composite rising 2.26% to a record 27,122.09 and the Nasdaq 100 gaining roughly 2.8%. Meta surged 11% on early signs that its AI-agent efforts were gaining traction, while AMD crossed a $1 trillion market capitalization as chipmakers rallied on renewed confidence in AI demand. The move was powerful enough to lift the S&P 500 1.49%, despite a still-firm dollar and a recently hawkish Federal Reserve. It also broadened beyond the largest platforms: SanDisk, Coinbase and Lam Research posted double-digit or near-double-digit gains in the surrounding U.S. session. The immediate signal is that investors are again rewarding visible AI exposure, even as elevated rates keep duration risk high and the Fed’s projections point to another possible hike in 2026.

Oil posted the clearest cross-asset reversal, with WTI falling 4.5% to $95.78 and Brent dropping 3.4% to $100.34. Traders focused on possible U.S.–Iran diplomatic progress and the partial recovery of Saudi export shipments, pulling crude back from levels above $100 and reducing the immediate inflation shock from the conflict. The relief was not clean: Yemen’s Houthis claimed missile and drone attacks on sensitive targets in Riyadh, while reports continued to cite Iranian military preparations. Gulf equity markets weakened after the attacks, underscoring that the geopolitical risk premium has narrowed rather than disappeared. For rates and risk assets, the decline gives the Fed some breathing room; for energy markets, further de-escalation—not merely diplomatic activity ahead of the United Nations meeting—will determine whether the move becomes durable.

The Federal Reserve’s 25-basis-point increase to 3.75%–4.00% remained the central rates backdrop, with 16 of 18 officials projecting at least one further 2026 hike. Treasury yields nonetheless eased during the equity rally: the 10-year finished more than four basis points lower at 4.951%, while the 30-year fell to 5.284%. The dollar index stayed near 100.22 after gaining about 1.11% over the week, showing that the easing in long yields did not amount to a reversal of the hawkish repricing. Elsewhere, the Bank of Japan raised its policy rate to 1.25%, its highest since 1995, and the Bank of England held at 3.75% in a 6–3 vote while leaving room for a November insurance hike. The global policy mix therefore remains restrictive even as equities rebound.