Stocks rallied and bond yields declined on Thursday after Federal Reserve Governor Christopher Waller suggested he would be inclined to support keeping interest rates unchanged at the upcoming September meeting, provided inflation data continues to show signs of easing. This statement led money markets to significantly pare back their expectations for a September Fed rate hike, with bets falling from 63.2% to 50.4% for an increase. The S&P 500 experienced its best day in a month, climbing 1.06% to close at 7,747.71, while the Nasdaq Composite rose 1.4% to 26,584.06. The Dow Jones Industrial Average gained 1.18%, or 624.16 points, reaching 53,686.11.
The benchmark 10-year Treasury note yield decreased to 4.77%, down from its highest level since November 2023 seen the previous day. The 2-year US Treasury yield, more sensitive to Fed policy, slid 4 basis points to 4.34%. This broader drop in yields was also supported by a sharp rally in the Japanese yen against the US dollar. While crude oil prices remained elevated, with West Texas Intermediate futures settling at $91.30 per barrel and Brent futures at $95.52, Waller indicated that higher energy prices had not substantially impacted other parts of the economy.
Several companies saw significant stock movements. Snowflake surged over 20% after reporting better-than-expected second-quarter earnings and revenue, along with strong guidance. Dell Technologies climbed 5% for a second day, building on strong quarterly results and an uplifted fiscal 2027 forecast, driven by accelerating demand for AI computing. In contrast, Broadcom shares dropped nearly 3% following a disappointing revenue forecast for the fiscal fourth quarter. Tyson Foods tumbled nearly 7% after slashing its full-year guidance, citing beef pressures, and Ultragenyx Pharmaceutical plunged over 46% after its Phase 3 trial for an Angelman syndrome drug failed to meet its primary endpoint.
