US and Europe Rally Post-Fed as BoJ Hikes Into View

Stocks joined bonds higher Wednesday as the Federal Reserve raised interest rates for the first time since 2023, lifting the S&P 500 by about 1%. Markets had been pressured lately by elevated bond yields as traders worried about rising oil prices and their impact on inflation. Treasury 10-year yields declined from the highest level since 2007, snapping an eight-day rising streak, while Frankfurt's DAX 40 rose about 0.7% to above 25,700 on Thursday as oil prices continued to decline. Both indices show consolidation phases after testing recent highs and remain sensitive to central bank signals.

Nonfarm payrolls grew 162,000 in August, much more than the 53,000 that economists polled by Dow Jones expected, pushing Treasury yields higher following the report, with the 2-year yield hitting its highest level since January 2025. Eight of the 11 S&P sectors are higher so far in 2026, with energy leading, up 43%. The S&P 500 is up approximately 11.9% for the year, though volatility has increased as inflation concerns compete with corporate resilience.

What the calendar says

2026-09-18 (time not fixed) — Bank of Japan policy decision. The Bank of Japan has raised its policy rate by 25 basis points to 1.25%, the highest level since 1995. The BOJ said the move was because of a risk that inflation will deviate upward to beyond its 2% target. The move also marked a quickening in the BOJ's rate hike cycle, with the rise taking place three months from the BOJ's last hike, as compared to six months previously. The decision is expected to move USD/JPY, with strengthening yen pressure likely on the cross as Japanese rates continue to normalise.

No other scheduled releases appear on the calendar for the days ahead; the next wave of major data and central bank decisions will arrive later in the month. Readers can follow the full schedule on our economic calendar.

S&P 500: resistance at 7,674, support at 7,524

Price currently trades near 7,674, close to a horizontal resistance zone (marked in red) that has capped rallies repeatedly since early September. The index touched a low near 7,524 on September 16 before recovering, and that level now marks near-term support. A break above 7,674 would open air toward the prior highs near 7,760, while failure to clear resistance risks another test of the 7,524–7,550 zone. Momentum remains mixed, with price oscillating within a 150-point range.

DAX 40: watching 25,674 and 25,569

The index is currently trading around 25,674, having consolidated in a broad range after falling from highs above 26,600 in late August. A horizontal support zone sits near 25,569 (marked on the chart), coinciding with lows printed on September 12 and again on September 17. Resistance overhead lies closer to 26,000, a psychological level that has attracted sellers multiple times in recent weeks. The index has declined 1.40% over the past month, though it remains 8.82% higher than a year ago. The pattern suggests range-bound conditions persist, with the next directional move likely determined by a break of either 25,569 support or 26,000 resistance.

Both equity benchmarks display sideways consolidation within well-defined ranges. The narrowing price action suggests traders are awaiting fresh catalysts—whether from central bank rhetoric, inflation prints, or geopolitical developments—before committing to a directional break. Until then, the defined levels on each chart offer tactical waypoints for watching momentum shifts.