US stock futures rebounded Thursday morning. Contracts tied to the S&P 500 rose about 0.4%, Dow Jones Industrial Average futures added 0.2%, and Nasdaq-100 futures climbed roughly 0.7% in premarket trading. The bounce came a day after the Federal Reserve’s decision sparked the worst selloff on Wall Street in more than a year.

The rebound follows a brutal Wednesday. The Dow closed down 1,153.18 points, or 2.19%, at 51,594.14 — its steepest one-day drop since April 2025. The S&P 500 slid 1.52% to 7,316.15, and the Nasdaq Composite fell 1.74% to 24,442.94, leaving the tech-heavy index more than 10% below its record high.

Why the Fed spooked the market

The Federal Open Market Committee voted 9-3 to keep the target range for the federal funds rate at 3.5% to 3.75%. It was the fifth straight meeting on hold and the lowest level since November 2022. What rattled investors was the dissent: three officials — Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan — italicpreferred/italic a quarter-point hike.

In its statement, the Fed said inflation “remains elevated relative to the Committee’s 2 percent goal” and flagged “elevated uncertainty that owes, in part, to the conflict in the Middle East.” That hawkish tilt flipped the script for a market that had spent months pricing in cuts. Futures now imply roughly a 72% chance of a rate hike in September, according to CME Group data.

Bonds and the dollar

Higher-for-longer expectations pushed yields up. The 10-year Treasury yield held near 4.6%, pinning growth stocks that are most sensitive to the rate used to discount future earnings. With cash and the short end still paying, some investors have rotated toward short-term government bond funds to ride out the volatility rather than reach for duration.

Overnight and oil

Asian equities steadied overnight, helping set a firmer tone for the US open. Crude oil stayed elevated as tensions in the Middle East kept a bid under energy prices — the same supply-driven inflation pressure the Fed singled out in its statement. A firmer oil price complicates the disinflation story and gives the hawks on the committee more ammunition.

Earnings in focus

Corporate results are doing some of the heavy lifting. Microsoft jumped more than 8% in premarket trading after strong growth in its Azure cloud business, a reminder that the AI capital-expenditure cycle is still translating into revenue for the largest platforms. With megacap technology accounting for an outsized share of index weight, individual earnings beats can steady the tape even when the macro backdrop turns hostile.

What to Watch at the Open

  • Treasury yields: A 10-year yield pushing back above 4.65% would pressure rate-sensitive tech and homebuilders; a pullback would give equities room to extend the rebound.
  • September odds: Watch fed funds futures. If the implied probability of a September hike climbs further above 72%, expect renewed pressure on growth names.
  • Big Tech earnings: Cloud and AI guidance will matter more than the headline earnings-per-share line, as it did for the chip-driven premarket moves earlier this month.
  • Oil and the Middle East: Any escalation that lifts crude further feeds directly into the inflation narrative the Fed is now leaning on.

For now, the pre-open bid signals that dip buyers are testing Wednesday’s lows. Whether that holds depends less on the charts than on the bond market — and on how convincingly this earnings season can outrun a Fed that has stopped talking about cuts.

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