The S&P 500 had a strong session as investors felt more confident about the path of U.S. interest rates. The index rose 1.03% to close at 7,745.62, a clear rebound after recent pressure on stocks.
The move came as traders focused on comments from Federal Reserve Governor Christopher Waller. His remarks gave markets some relief because he said the Fed could keep rates at their current level if new data shows that inflation continues to cool.
That message mattered because rate fears had weighed on stocks in recent sessions. Higher interest rates can make stocks less attractive, especially companies whose value depends on future growth. A softer view from the Fed can reduce that pressure and support share prices.
The rise in the S&P 500 also came as Treasury yields moved lower. The 10-year U.S. Treasury yield fell for a second straight session after it had reached its highest level since November 2023.
Fed Comments Lift Market Mood
The Federal Reserve remained at the center of the market story. Investors had worried that stubborn inflation could force the central bank to raise rates at its September meeting.
Waller gave a more balanced message. He said that if August inflation data shows more progress toward the Fed’s 2% goal, he would support keeping the policy rate at its current level. At the same time, he made it clear that a rate hike remains possible if inflation comes in too high.
The current Fed policy rate stands at 3.50%-3.75%. Waller said the decision at the September 15-16 meeting would depend heavily on new economic data.
Before Waller’s comments, traders had placed a higher chance on a rate hike. After his remarks, the market’s expected chance of a September increase fell to about 50.4% from 63.2% on the previous day, based on CME FedWatch data.
This change gave investors a reason to buy stocks. It also helped push bond yields lower. For markets, the message was simple: the Fed may not need to raise rates if inflation shows further improvement.
Technology Stocks Lead the Move
Technology stocks played a major role in the market advance. The Nasdaq Composite rose about 1.40% to 26,584.21, based on preliminary closing data. The Dow Jones Industrial Average also had a strong session, with a rise of 1.18% to 53,689.32.
Large technology companies received support from the fall in Treasury yields. These companies often have high valuations based on expected future profits, so lower bond yields can make their shares more attractive.
Several major technology names posted strong gains. Microsoft rose 2.87%, while Meta Platforms gained 3.57%. Apple also moved higher, with a gain of 1.23% in the session. Nvidia rose 1.40% after news of its planned acquisition of Hugging Face.
The Nvidia deal was worth about $12.93 billion. The deal added another major artificial intelligence story to a market that continues to place strong value on AI growth.
Nvidia and AI Stay in Focus
Artificial intelligence remained an important part of the stock market story. Nvidia has become one of the biggest names in the AI boom, so news about the company can have an effect well beyond its own share price.
Nvidia’s planned purchase of Hugging Face gave investors another reason to focus on the company’s long-term AI strategy. The deal also showed that the company continues to expand its position across the wider AI ecosystem.
However, not every chip stock rose. Broadcom fell after its latest results and outlook failed to satisfy investors. The company had strong revenue growth, but the market expected more from a company that has become closely linked to the AI investment cycle.
This contrast shows how demanding investors have become. Strong results alone may not be enough. Companies tied to AI now face high expectations, and even a good report can lead to a fall in the share price if the outlook does not beat those expectations.
Snowflake Posts a Big Gain
Company results also helped support the wider market. Snowflake was one of the strongest performers during the session. Its shares rose sharply after the software company posted better-than-expected results and raised its full-year product revenue forecast.
Snowflake’s move stood out because it showed that the market was willing to reward companies with strong results and better forecasts.
ServiceNow, Salesforce and Adobe also rose as software stocks gained broader support. The strength across parts of the software sector helped offset weakness in some chip stocks.
At the same time, Hewlett Packard Enterprise shares fell after its sales failed to meet the high expectations set by investors. Tyson Foods also dropped after the company cut its annual forecast.
These moves show that the market was not simply buying every stock. Investors continued to look closely at company results, future forecasts and business conditions.
Lower Bond Yields Help Stocks
Treasury yields were another major part of the story. The benchmark 10-year Treasury yield fell to about 4.75%, after it had reached 4.818% on Wednesday, its highest level since November 1, 2023.
The fall in yields gave stocks some breathing room. When Treasury yields rise quickly, investors can become more cautious about stocks because safer government bonds offer higher returns.
Lower yields can have the opposite effect. They can make equities more attractive and reduce some pressure on company valuations.
This effect was especially clear in technology stocks. The Nasdaq had a larger gain than the S&P 500, which shows how rate-sensitive growth shares benefited from the change in bond markets.
Oil Prices Remain a Risk
The stock market did not have a completely easy backdrop. Oil prices remained a major concern.
U.S. crude traded above $91 a barrel, while Brent crude moved near $96 a barrel. Oil prices have risen sharply as tensions between the United States and Iran have added to fears about supply disruptions.
Higher oil prices can create a problem for the Federal Reserve because they can add pressure to inflation. If fuel and energy costs stay high, the path toward lower inflation could become harder.
That means the market still faces a key risk. Lower bond yields helped stocks on Thursday, but a fresh rise in oil prices could bring inflation worries back very quickly.
Jobs Report Becomes the Next Test
The next major event for markets is the U.S. jobs report. The report for August was due on Friday, September 4.
Investors want to know whether the labor market remains strong or shows further signs of weakness. The answer could affect expectations for the Fed’s next move.
Economists expected the U.S. economy to add about 56,000 jobs, with the unemployment rate at 4.1%. Other market estimates placed job growth near 55,000 to 65,000, with an unemployment rate around 4.2%.
A strong report could create new worries about inflation and rates. A weak report could support the view that the Fed should avoid another rate hike, but an unusually weak result could also raise concerns about the health of the economy.
For that reason, the jobs report could create a fresh move in stocks, bonds and the dollar.
What the S&P 500 Move Means
The 1.03% rise to 7,745.62 shows how quickly market sentiment can change when investors receive more supportive signals from the Federal Reserve.
Just a short time earlier, higher bond yields and rate concerns had created pressure. Waller’s comments changed part of that view. As rate-hike expectations fell, Treasury yields also moved lower, and stocks found fresh support.
Still, investors cannot assume that the rate debate is over. Inflation remains above the Fed’s 2% goal, oil prices remain high, and the central bank has not ruled out a rate increase.
The August inflation report will also matter. Waller said the data, due on September 11, will play a major role in his view of policy. If inflation continues to cool, the case for holding rates steady becomes stronger. If prices show a fresh rise, the possibility of a hike could return.
A Strong Day With More Tests Ahead
The S&P 500’s 1.03% gain to 7,745.62 was a positive sign for investors after recent market pressure. Lower Treasury yields, softer expectations for a September rate hike and strong gains from major technology companies all helped create a better mood on Wall Street.
The Nasdaq’s 1.40% rise and the Dow’s 1.18% advance showed that the move was broad across the major U.S. indexes.
Yet the market still faces several important questions. Inflation must continue to move toward the Fed’s target. Oil prices must not create a new wave of price pressure. Treasury yields must remain under control. Corporate earnings must continue to justify high stock valuations.
Most of all, investors now need to study the jobs report and the next inflation figures. Those reports could decide whether Thursday’s rally marks the start of a more stable period or simply a short break from the recent uncertainty.
For now, the message from Wall Street is clear: the S&P 500’s rise to 7,745.62 shows that investors are ready to move higher when rate fears ease, but the next economic reports will decide how strong that confidence really is.
ALSO READ: Brent Crude Settles at $95.52 as Oil Market Faces New Risks
