The S&P 500 is bouncing off its 100-day moving average after Wednesday's Federal Reserve rate hike triggered a broad sell-off. Futures point higher into Thursday's session, but the index still needs to reclaim the 7,600 region before the rebound looks convincing.
The S&P 500 bounced right off its 100-day moving average, which sits near 7,510. That came a day after the Federal Reserve's first rate hike in three years sent stocks lower. S&P 500 futures were up 0.8% early Thursday. Futures tied to the Dow Jones Industrial Average advanced 379 points, or 0.7%.
Fed hike sparks Wednesday sell-off
The Federal Reserve raised the overnight federal funds rate by a quarter percentage point on Wednesday, bringing the target range to 3.75%-4%. The blue-chip Dow lost more than 630 points, or 1.2%, dragged down by financial services names. The S&P 500 edged lower by 0.5% on Wednesday. The decision was unanimous, and 16 of 18 policymakers are projecting at least one more rate hike before the end of the year.
Fed Chairman Kevin Warsh said inflation remains too high. Mark Haefele, chief investment officer at UBS Global Wealth Management, said his team remained "positioned for further equity gains while preparing for near-term volatility."
Technical levels in focus
The index's bounce off the 100-day moving average also lands close to the 23.6% Fibonacci retracement level near 7,463, giving buyers a region to lean against. The next test is the 7,600 region, which would need to be reclaimed to put the recent highs near 7,800 back into view. A sustained break below the 100-day moving average would expose the 7,300 level next.
Oil and yields ease pressure
A steadier showing in long-term Treasury yields and softer oil prices helped take pressure off valuations Thursday. U.S. crude traded more than 1.5% lower around $100 per barrel. Brent slid more than 2% to $103.48. Investors are now turning to Thursday's jobless claims and housing starts data for further clues on the economy's health.
Sources: CNBC, InvestingLive
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