US stock futures climbed on Thursday, with the S&P 500 Index futures little changed as of 7:53 a.m. in New York. Major indices opened higher, with the Dow Jones Industrial Average rising 394.74 points (0.74%) to 53,456.69, the S&P 500 gaining 41.29 points (0.54%) to 7,707.89, and the Nasdaq Composite increasing 160.20 points (0.61%) to 26,378.03. This positive movement was largely driven by comments from Federal Reserve Governor Christopher Waller, who indicated he would support maintaining current interest rates at the September policy meeting if upcoming inflation data shows continued progress in cooling price pressures. These remarks led to a decrease in the likelihood of a rate hike, with the CME FedWatch tool showing a 12-percentage-point drop in hike probabilities to 54.6%.
Technology shares were a key focus following recent earnings reports. Snowflake shares surged over 23% after reporting stronger-than-expected second-quarter results and raising its full-year product revenue forecast, citing demand from AI. This positive sentiment extended to other software companies, with ServiceNow rising 5.43%, Salesforce gaining 3.14%, and Adobe up 3.62%. In contrast, chipmaker Broadcom saw its shares fall nearly 4% in premarket trading and over 5% early in the session after its fourth-quarter revenue forecast fell short of lofty Wall Street expectations, despite forecasting strong AI chip sales. Hewlett Packard Enterprise also experienced a decline of about 4% as its increased sales did not meet elevated investor expectations.
The broader market reacted positively to the easing rate hike expectations, with Treasury yields also slipping. The yield on the benchmark 10-year US Treasury note fell to around 4.75% after Waller's comments, pausing a recent selloff. Despite the generally positive market reaction, some analysts remain cautious about September, noting that historically it has been a volatile month for the S&P 500. Geopolitical risks and a light earnings calendar are also cited as factors that could limit significant stock market gains this month, with eToro analyst Jakub Rochlitz pointing out that nine of the 40 worst S&P 500 drops have occurred in September.
