Dow Jones rises 627 points as Fed Governor Waller signals support for steady rates if inflation cools
US stocks climbed significantly after Federal Reserve Governor Christopher Waller indicated he would favor keeping interest rates unchanged if August data confirms easing price pressures, though market expectations of a September hike remain near 50%. The ECB is also set to begin its final rate-cutting cycle in September.
US stocks rallied on Thursday as investors reduced bets on an immediate Federal Reserve rate increase following remarks from Governor Christopher Waller. Waller stated that while he might support raising rates if inflation proves persistent, he would prefer leaving interest rates unchanged if price pressures continue to ease. He noted his policy decisions would depend heavily on incoming August inflation figures. Consequently, the S&P 500 gained 1.07% to close at 7,748.27, while the Dow Jones Industrial Average added 627.37 points, reaching 53,689.32. The Nasdaq Composite also surged 1.40% to 26,584.21. Despite Waller's comments easing fears of a hike, the probability of the Fed raising rates at its September meeting dropped slightly to 50.4%, down from 63.2% the previous day, according to the CME FedWatch tool. Some investors remain cautious due to rising oil prices and geopolitical tensions in the Middle East which could reignite inflation concerns. Beyond Wall Street, natural gas futures rose 1.0% to $2.987 per million British thermal units driven by warm weather. In contrast, Broadcom shares fell after missing revenue expectations, while Snowflake stock climbed on strong earnings guidance.
