Wall Street closed sharply higher on Thursday after Federal Reserve Governor Christopher Waller signalled he could support keeping interest rates unchanged at the September meeting if upcoming data confirms inflationary pressures are easing.
The Dow Jones Industrial Average rose 624.16 points, or 1.18%, to 53,686.11, while the S&P 500 gained 81.11 points, or 1.06%, to 7,747.71. The Nasdaq Composite added 366.23 points, or 1.40%, to 26,584.06.
The rally came as markets pared back expectations for another Fed rate hike this month. According to CME’s FedWatch tool, the implied probability of a September hike fell to 50.4% from 63.2% on Wednesday following Waller’s remarks.
Waller told Reuters he would be inclined to leave rates unchanged if incoming data showed price pressures continuing to cool, although he would support a hike if inflation remained elevated.
“Commentary from Fed Governor Waller (is) providing a broad lift for markets writ large,” said Bill Northey, senior investment director at U.S. Bank Wealth Management, Billings, Montana.
“Underneath the broad market indices, we’re seeing continued influence by those late reporters from the second-quarter earnings reporting season,” Northey added. “And that’s driving some differentiation between spaces like semiconductors, where we had a high-profile report yesterday afternoon, and also within the software space, where we’ve seen some differential results, meeting or exceeding somewhat lower bar standards.”
The benchmark US Treasury yield also fell for a second straight session after recently touching its highest level since November 2023. Bond yields had climbed sharply in recent sessions as investors worried about inflation, rising government debt and geopolitical uncertainty.
Friday’s August employment report will now take centre stage, with the US economy expected to have added 56,000 jobs last month while the unemployment rate is forecast to remain at 4.1%.
Among individual stocks, Nvidia gained 1.8% after announcing plans to acquire developer platform Hugging Face for US$12.9 billion, while Broadcom fell 2.7% after its fourth-quarter revenue forecast fell short of lofty expectations surrounding the artificial intelligence boom.
Snowflake was among the biggest gainers, surging 16.6% after forecasting strong annual revenue. The upbeat outlook lifted other software stocks, with ServiceNow, Salesforce and Adobe gaining between 2.1% and 6.5%.
Crypto-linked shares also rallied as bitcoin recovered following two sessions of losses. Strategy jumped 17.6%, Coinbase Global surged 10.1% and Robinhood Markets climbed 16.6%.
All 11 major S&P 500 sectors finished higher, with consumer discretionary leading the gains while energy stocks lagged.
The broader market was firmly positive, with advancing stocks outnumbering decliners by 1.98 to 1 on the New York Stock Exchange and 1.67 to 1 on the Nasdaq.
Trading volume on US exchanges reached 15.25 billion shares, above the 20-day average of 15.09 billion shares.
Reuters
