Rate Hike Reversal: Market Seesaws as Oil Prices Ease

The market staged a dramatic reversal after the Federal Reserve's first rate hike in three years. On September 17 Eastern Time, the Nasdaq surged more than 1.5%, and chip stocks like Intel, AMD, and Micron rallied collectively.

The key variable behind this reversal was oil prices: Middle East crude supply concerns eased, Brent crude pulled back from highs, and market expectations for runaway inflation and consecutive Fed hikes cooled accordingly.

Gold also reclaimed the $4,300/oz level, trading as high as $4,335.354/oz, up 1.71%. Gold's rebound followed the same logic: as oil prices retreated and runaway inflation expectations cooled, the pressure for yields to continue rising unilaterally eased.