Fed Takes Bow, Tech Stocks Take Another Hit

But the price of oil continues to fall, which puts the risks of inflation and economic strain somewhat at bay. Crude oil futures closed down 3.4% to close at $50.48 per barrel, having traded below the psychologically important $50 per barrel level intraday.

"The longer oil prices stay here, the more the Fed is just comfortable being at home [with rates at 5.25%]," says Levy.

So why did bonds rally and stocks fall Thursday? All logic would suggest bond yields would rise as rate cuts odds drop, and stocks would climb as the economy shows signs of strength.

Thank oil and technical factors for the 10-year Treasury note climbing 8/32 to yield 4.75%, says William Hornbarger, fixed-income analyst at A.G. Edwards in St. Louis. Falling oil prices remove inflation pressures and relieve the bond market of concerns about rate hikes, even as the economy grows, he says. Traders also report large pension managers buying in at the long end of the yield curve, he says, adding that many investors see yields over 4.75% on the 10-year as a good entry point.

As for stocks, concerns about technology and earnings season pulled the plug on the Nasdaq Composite Thursday. The tech-heavy index fell 1.5% to close at 2443.21. The Dow Jones Industrial Average fell 0.07% to close at 12,567.93, and the S&P 500 dipped 0.3% to close at 1426.37.