The S&P 500 rose 81.67 points, or 1.07%, to 7,748.27, while the Nasdaq Composite gained 366.39 points, or 1.40%, to 26,584.21. The Dow Jones Industrial Average added 627.37 points, or 1.18%, to 53,689.32.
Waller told Reuters he would be inclined to leave interest rates unchanged if the data shows price pressures are continuing to ease, while adding that he would support a rate hike if inflation fails to cool.
His comments quickly shifted the rate outlook. The probability of a Fed rate hike at the September meeting fell to 50.4% from 63.2% a day earlier, according to CME’s FedWatch tool.
The move also gave some relief to the bond market, with the benchmark U.S. Treasury yield falling for a second consecutive session after recently reaching its highest level since November 2023. Long-dated yields had climbed sharply as investors worried about inflation, rising government debt and geopolitical uncertainty.
Live Events
“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.
But beneath the broad market rally, earnings continued to separate winners from losers, particularly in technology and AI-related stocks.Nvidia gained after the company said it would buy developer platform Hugging Face for $12.9 billion, adding to its push into the artificial intelligence ecosystem and putting it in greater competition with OpenAI and Anthropic.
Broadcom, however, fell after its fourth-quarter revenue forecast came in below the lofty expectations surrounding the AI boom. The decline underscored the increasingly high bar for companies benefiting from the surge in AI investment.
“Underneath the broad market indices, we’re seeing continued influence by those late reporters from the second-quarter earnings reporting season,” Northey said. “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.”
Software stocks provided another leg to the rally, with Snowflake surging after forecasting strong annual revenue. ServiceNow, Salesforce and Adobe also advanced.
Thursday’s economic data offered a mixed signal for the Fed. Weekly jobless claims remained low and activity in the services sector accelerated, pointing to resilience in the economy. At the same time, services input prices reached their highest level since October 2022, while the international trade gap widened 24.4%.
Investors now turn to Friday’s employment report for a clearer signal on the Fed’s next move. The Labor Department is expected to report that the U.S. economy added 56,000 jobs in August, with the unemployment rate holding at 4.1%.
Crypto-linked stocks also gained as bitcoin recovered from two consecutive sessions of losses, lifting Strategy, Coinbase Global and Robinhood Markets.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)