US Equity Indexes Rebound Following Wednesday's Drubbing in Fed's Policy Aftermath

US equity indexes rose after midday Thursday, with the Dow Jones Industrial Average set to break its 10-day losing streak, as a sharp selloff that followed a pullback in the Federal Reserve's easing program lost momentum.

The S&P 500 and the Nasdaq climbed 0.2% to 5,883.5 and 19,426.5, respectively, and the Dow rose 0.3% higher at 42,433.1. Technology, communication services, and utilities led the gainers intraday, while energy was the steepest decliner.

Investors "clawed back some of the losses as investors digested the Federal Reserve's hawkish tilt and raised inflation forecast for 2025," a research note from D.A. Davidson said.

The Dow closed lower on Wednesday for the 10th consecutive day, its longest stretch of declines in more than four decades after the Fed lowered its forecast for interest-rate cuts next year to two from four. The S&P 500 and the Nasdaq also closed sharply lower as, according to Desjardins, the Fed raised its price growth outlook by 0.4 percentage points for 2025. The Fed "has upgraded its neutral rate forecast in every [Summary of Economic Projections] this year, raising it from 2.5% late last year to 3.0%" on Wednesday, the Desjardins note said.

In economic news Thursday, the US gross domestic product was revised upward to a 3.1% increase in Q3 from a 2.8% gain in the previous estimate, above an unrevised 2.8% increase expected in a survey compiled by Bloomberg. GDP rose by 3% in Q2.

Further, the Conference Board's measure of leading indicators rose by 0.3% in November, in contrast with expectations for a 0.1% decline in a survey compiled by Bloomberg and following a 0.4% decrease in October.

US Treasury yields were mixed intraday, with the 10-year up eight basis points to 4.58%. The two-year yield slumped six basis points to 4.3%.

In company news, Darden Restaurants (DRI) lifted its full-year revenue outlook as the restaurant operator recorded better-than-expected fiscal Q2 results. Shares surged 15% intraday, the top performer on the S&P 500.

West Texas Intermediate crude oil futures fell 0.4% to $70.32 a barrel.