US equities climbed on Thursday, building on optimism that cooling crude costs may keep inflation in check, just one day after the Federal Reserve delivered its first rate increase since 2023. The rebound marked the first positive session of the week for major indexes.

The S&P 500 advanced 1.1%, while the Nasdaq 100 surged 1.7%, with both benchmarks posting their strongest single-day performance in more than six weeks. The gains reversed Wednesday's selloff triggered by the Fed's rate decision, though some strategists urged caution.

"Investors should be very careful not to interpret this as an 'all-clear' signal for the market," wrote Matt Maley, chief market strategist at Miller Tabak & Co., in a note following the rally.

Brent crude slipped 1.6% to $104 per barrel, providing relief to equity markets worried about sustained price pressures. Meanwhile, US Treasury yields fell across the board, with the 10-year note dropping to 4.94%.

Technology shares led the charge higher, with the iShares Semiconductor ETF climbing 3.4%. Chipmakers including Marvell Technology, Intel, and AMD all advanced at least 4.8% during the session.

Despite the rebound, some market watchers remain cautious on the outlook. Ed Yardeni this week trimmed his year-end target for the S&P 500 to 7,900 points from 8,400, citing concerns that escalating tensions in Iran could keep oil prices elevated for an extended period.

Even with two or three additional rate hikes possible this year, equities should be able to withstand the pressure, according to Seema Shah, chief global strategist at Principal Asset Management. Investors may experience "some wobbles and uncertainty," she said in an interview, but strong corporate earnings will help the market navigate the turbulence.

Although September has historically been a weak month for stocks, Scott Rubner, head of equities and derivatives strategy at Castle Securities, said he is "increasingly constructive" on the path ahead.

At Thursday's close, the S&P 500 stood at 7,637.76, up 1.1%. The Dow Jones Industrial Average gained 0.6% to finish at 51,778.04, while the Nasdaq Composite rose 1.7% to 26,418.3. The Nasdaq 100 also advanced 1.7% to 29,446.98, and the Russell 2000 added 0.6%, ending the day at 2,874.63.