US STOCKS-Wall St rises as oil slide offers respite after Fed rate hike

By Tharuniyaa Lakshmi

Sept 17 (Reuters) - The major US stock indexes jumped on Thursday as retreating oil prices improved market sentiment, with the Federal Reserve's first interest-rate hike under Chair Kevin Warsh underscoring the central bank's commitment to managing inflation.

The policy decision, which addressed a chronic source of unease, prompted investors to return to favored sectors. Technology shares rose, with Nvidia NVDA.O and Amazon AMZN.O adding more than 2% each.

The gains will be crucial in the second half of September, historically a weak month for equities, with the benchmark S&P 500 .SPX losing 1.7% so far this month.

"For equities, the message is clear. The start of a hiking cycle can bring volatility, but volatility does not have to end a bull market," said Brett Mitstifer, chief investment officer of private banking and wealth management at Flagstar Bank.

"If this cycle remains measured, disciplined investors should view market dislocations as opportunities to upgrade quality, not reasons to abandon risk altogether."

At 11:42 a.m. ET, the Dow Jones Industrial Average .DJI rose 316.52 points, or 0.61%, to 51,778.04, the S&P 500 .SPX gained 80.05 points, or 1.06%, to 7,631.86, and the Nasdaq Composite .IXIC was up 411.57 points, or 1.59%, to 26,390.96.

The small-cap Russell 2000 index .RUT added more than 1% to 2,891.45 despite its greater sensitivity to interest rates.

However, the Fed warned more hikes may be needed in the coming months to control prices. Uncertainty over how high interest rates could ultimately rise is likely to keep stocks and bonds volatile in the weeks ahead.

Traders see a near 51% chance of another increase when the central bank meets next, in October, compared with about 44% a day ago, according to CME's FedWatch.

The yield on the benchmark 10-year U.S. Treasury also slipped, taking some pressure off equities. High yields on risk-free U.S. Treasuries typically dampen the appeal of stocks.

Eight of the 11 major S&P 500 sectors were trading higher. Utilities .SPLRCU led gains with a 1% jump.

The S&P 500 financials index .SPSY was flat and on course for its fourth consecutive day in the red.

OIL PULLS BACK, MIDDLE EAST RISKS PERSIST

Meanwhile, oil prices dropped for the second straight day, with Brent crude futures down more than 2% to $103.43. US West Texas Intermediate crude futures fell about 2% to $100.66.

Crypto-linked stocks rose after the US securities regulator unveiled a five-year exemption for tokenized stock trading. Robinhood HOOD.O and Circle Internet Group CRCL.N rose about 3% and 4%, respectively, while Coinbase COIN.O advanced 3%.

Shares of neocloud firms gained, with Nebius NBIS.O and IREN IREN.O up about 2% each. Nebius said it will raise pay-as-you-go prices for leasing select Nvidia chips from October 1.

CoreWeave CRWV.O fell 4% after it announced plans to raise capital via stock and convertible bond offerings.

Fluence Energy FLNC.O tumbled more than 14% after lowering its revenue forecast for fiscal year 2026.

Gold miners rose following a 2% jump in bullion prices. The VanEck Gold Miners ETF added 3.5%.

Advancing issues outnumbered decliners by a 2.9-to-1 ratio on the NYSE and by a 3.03-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and 15 new lows, while the Nasdaq Composite recorded 46 new highs and 87 new lows.