The U.S. stock market rallied to its best day in six weeks on Thursday, as falling oil prices and easing pressure from the bond market helped Wall Street reverse many of its moves from the prior day.

The S&P 500 surged 1.1%, marking merely its second advance in the past nine sessions.

The Dow Jones Industrial Average gained 316 points, or 0.6%, while the Nasdaq composite rose 1.7%.

Stocks got a boost after the price for a barrel of Brent crude oil slid 1% to settle at $104.82.

That’s down from the nearly $110 it reached earlier in the week on worries that the war with Iran will keep oil bottled up in the Middle East instead of going to customers worldwide.

A decline in oil prices precipitates a surge in stocks.

Brent is, of course, still considerably more expensive than the $72 per barrel it cost earlier this summer, but Thursday’s decline helped drive yields lower in the bond market and alleviated some of the pressure on stocks.

The yield on the 10-year Treasury dropped to 4.93% from 5.01% late Wednesday.

Higher yields make borrowing more expensive for everyone, from the U.S. government to people wanting to buy houses to businesses wanting to build data centers.

This, in turn, slows the economy.

On Wednesday, the Federal Reserve raised the short-term interest rate under its control—the federal funds rate—by a quarter of a percentage point, marking its first hike in over three years.

Officials also indicated that they may raise the federal funds rate once more this year as they seek to bring the nation's elevated inflation under control.

The signals sent Wall Street on a roller coaster ride.

Stocks initially clung to gains for the day following the Fed's announcement on Wednesday.

They then plummeted sharply before recouping a substantial portion of those losses prior to the close of trading.

On the upside for markets, the shift towards higher interest rates fostered confidence that the Fed is committed to restoring inflation to its 2% target.

Questions had begun to surface earlier as to whether it would come under pressure from President Donald Trump, who is advocating for lower interest rates.

And the short-term economic pain could prove worthwhile if it brings inflation under control after years of its remaining excessively high.

On the downside for markets, higher rates erode the prices of stocks and other investments.

When investors earn more interest from bonds, which are seen as safer investments, they are less willing to pay high prices for other investments.

This adds to the slowing effect that higher rates have on the economy, as policymakers aim to remove the fuel for inflation.

Several reports issued on Thursday indicated that the U.S. economy may be sufficiently robust to endure higher interest rates.

One report stated that fewer American workers filed for unemployment benefits the previous week.

Another reported that manufacturing growth in the mid-Atlantic region exceeded economists' expectations.

Fed Chairman Kevin Warsh said on Wednesday that a strengthening economy was among the reasons Fed officials moved to raise interest rates, having kept them on hold earlier in the year.

He also cited “geopolitics,” along with the risk that the resulting price increases could spread and push up inflation elsewhere — an apparent reference to the war with Iran and its effect on oil prices.

On Wall Street, stocks within the artificial-intelligence sector persisted in their rebound following Monday's global sell-off.

Nvidia advanced 2.5%, while Advanced Micro Devices surged 6.4%.

That was despite OpenAI having disclosed six additional reports of “unexpected or concerning” behavior in AI models.

Over the weekend, leaders of the AI industry called for a slowdown in development in order to address safety issues for humanity

Shares of multiple homebuilders likewise advanced, notwithstanding a report indicating that the industry commenced construction on fewer new homes last month than economists had anticipated.

The housing sector has ranked among those most severely affected by the ascent of the 10-year Treasury’s yield, which surpassed 5% this week for the first time since 2023 and has driven mortgage rates upward.

Thursday's decline in yields buoyed D.R. Horton by 1.5%, while PulteGroup gained 1.1%.

Rival Lennar recovered from an early loss to climb 1.7%, having reported weaker profit and revenue for the latest quarter than analysts had anticipated.

On balance, the S&P 500 advanced 85.95 points to 7,637.76.

The Dow Jones Industrial Average climbed 316.14 to 51,778.04, while the Nasdaq composite surged 439.87 to 26,418.30.

Across much of Europe, stock market indexes advanced, following a weaker close in Asia, while overseas markets experienced gains.

London’s FTSE 100 surged by 1.2% following the Bank of England’s decision to maintain its interest rates at their current level.