Wall Street rallied on Thursday, pushing major stock indexes up at least one percent as Federal Reserve Governor Christopher Waller signaled openness to holding interest rates steady if data shows inflationary pressures are abating.
Waller Remarks and Market Shifts
Stock prices climbed sharply across the board on Thursday after Federal Reserve Governor Christopher Waller stated that he would support leaving the central bank’s benchmark interest rate unchanged if upcoming data confirms that price pressures are easing. Waller added that he would support a rate hike if inflation fails to cool down.
The central bank governing board member pointed to recent monthly figures showing inflation slowing over the summer.
“I’m willing to sit and wait and be patient to see if the next inflation report also shows it declining. But if it reverses, then you know it’s time to pull the trigger and hike rates.”
Christopher Waller, Governor, Federal Reserve
Following the remarks, financial markets adjusted expectations for the central bank’s upcoming meeting scheduled for September. Meanwhile, benchmark U.S. Treasury yields retreated for a second consecutive session after touching their highest level since November 2023.
Broad Index Gains and Investor Sentiment
The market response lifted all major U.S. stock gauges significantly. The Dow Jones Industrial Average rose 624.16 points, or 1.18 percent, to close at 53,686.11. The S&P 500 gained 81.11 points, or 1.06 percent, to finish at 7,747.71, while the Nasdaq Composite advanced 366.23 points, or 1.40 percent, to 26,584.06 according to Reuters figures.
Market analysts pointed to the intersection of monetary policy comments and late-season earnings reports as the primary driver behind Thursday’s activity. Bill Northey, senior investment director at U.S. Bank Wealth Management in Billings, Montana, noted the dual influence of the central bank rhetoric and corporate scorecards.
“Commentary from Fed Governor Waller (is) providing a broad lift for markets writ large,”
Bill Northey, senior investment director at U.S. Bank Wealth Management
Northey added that underneath the broad market indices, there was continued influence from those late reporters from the second-quarter earnings reporting season.
Diverging Fortunes in Technology and AI
Beneath the overall index gains, individual corporate news shaped trading within the technology sector.
Conversely, chipmaker Broadcom dropped 2.7 percent following a weaker-than-expected fourth-quarter revenue forecast. The decline highlighted the increasingly stringent expectations facing companies at the center of the ongoing artificial intelligence infrastructure buildout. Software providers fared better overall; Snowflake jumped 16.6 percent on strong annual revenue projections, while ServiceNow, Salesforce, and Adobe posted gains ranging from 2.1 percent to 6.5 percent.
Economic Data and the Path Ahead
Thursday’s economic reports presented a mixed picture of domestic health. Weekly jobless claims remained low, and service sector activity accelerated, but the data also revealed that services input prices reached their highest level since October 2022.
Attention now turns to the Labor Department’s August employment report scheduled for Friday. Economists surveyed expect the data to show the U.S. economy added 56,000 jobs last month while holding the unemployment rate steady at 4.1 percent.
