The Nasdaq Composite had a strong session as it rose 362.90 points, or 1.38%, to close at 26,580.73. The rise gave investors fresh hope after a period of pressure on US stocks. Technology shares led much of the move, while a fall in US Treasury yields also gave support to stocks.
The Nasdaq is a major US stock index with a large share of technology and growth companies. Because of this, the index can react fast to changes in interest rates, bond yields, company results and investor views about future economic growth.
The latest rise showed that buyers had a clear advantage during the session. It also came at a time when investors had fresh clues about the next move from the US Federal Reserve.
Fed Comments Helped Lift Stocks
One of the main reasons for the rise was a change in expectations about US interest rates. Federal Reserve Governor Christopher Waller said he could support a decision to keep the Fed funds target rate steady if new data shows that price pressure is easing.
His comments had a quick effect on financial markets. The market cut its view of the chance of a rate rise at the Federal Reserve’s September meeting. The chance fell to about 50% from 63.2% on the prior session, according to CME FedWatch data.
This matters a lot for technology stocks. Higher interest rates can make future company profits less attractive at today’s prices. Lower or stable rates can have the opposite effect. As a result, large technology companies often get a strong boost when investors expect less pressure from the Federal Reserve.
Waller did not say that a rate rise was impossible. His view still depends on new economic data. If price pressure does not ease, he could support a rate rise. This means that the market still faces some uncertainty.
Treasury Yields Move Lower
US Treasury yields also played an important role in the stock market move. The yield on the benchmark 10-year US Treasury note fell to 4.758%, down 3.6 basis points. The yield had reached 4.818% on Wednesday, its highest level since November 1, 2023.
A lower bond yield can help growth stocks because it reduces some of the pressure on their valuations. Investors often compare the possible return from stocks with the return from safer government bonds. When bond yields rise sharply, stocks can lose some of their appeal.
The fall in the 10-year yield therefore gave technology shares more room to rise. It also helped improve the overall mood across Wall Street.
Technology Stocks Take the Lead
Technology was one of the main sources of strength for the Nasdaq. Large technology and artificial intelligence companies had a major role in the market move.
Nvidia rose after the company said it would buy developer platform Hugging Face for $12.9 billion. The deal adds another major artificial intelligence asset to Nvidia’s business and shows how strong the competition remains in the AI market. Nvidia shares rose 2.6% in the session.
Other large technology names also had strong gains. Microsoft rose 2.87%, Meta Platforms gained 3.57%, and Apple rose 1.23% in the session. Nvidia rose 1.40% in another market snapshot from the day.
These companies carry a large weight in major US stock indexes. When several of them rise at the same time, they can give the Nasdaq a strong lift.
Software Shares Also Gain
The software sector had a particularly strong session. Snowflake was one of the biggest winners after the company gave investors a positive revenue outlook. Its shares rose sharply and helped lift other software names.
Snowflake rose 20.2%, while ServiceNow gained 6.4%. Salesforce rose 3.4% and Adobe added 2.3%. The S&P Software & Services index rose 3.6%.
The move showed that the market was not focused only on the largest AI names. Investors also showed strong interest in software companies that may benefit from better demand and continued use of AI tools.
At the same time, not every technology company had a positive day. Broadcom fell 3.7% after its fourth-quarter revenue forecast came in below very high market expectations. The result showed that investors still expect a lot from companies at the heart of the AI boom.
The Wider Market Also Gains
The Nasdaq was not alone in its rise. Other major US indexes also posted solid gains.
The Dow Jones Industrial Average rose 645.71 points, or 1.22%, to 53,707.66. The S&P 500 gained 88.54 points, or 1.15%, to 7,755.14. The Nasdaq Composite gained 410.31 points, or 1.57%, to 26,628.14 in Reuters’ later final market report.
The figures supplied for this article put the Nasdaq Composite close at 26,580.73, up 362.90 points, or 1.38%. That exact figure should remain the reference figure for this report.
The difference between market data sources can occur because of different data feeds or later index updates. The key point is that the Nasdaq finished the session clearly higher.
Oil Prices Remain a Risk
The stock market rally did not remove every concern. Oil prices remained a major risk for investors.
US crude rose to $91.69 a barrel, while Brent crude rose to $95.75 a barrel. Geopolitical tension in the Middle East added to concerns about possible supply problems. Higher oil prices can create fresh inflation pressure because fuel costs affect many parts of the economy.
This creates a difficult situation for the Federal Reserve. The central bank wants inflation to move lower, but a sharp rise in energy prices can make that task harder.
For technology stocks, this risk is important. If inflation stays high, the Federal Reserve may keep rates high for longer or even raise them. That could put pressure on expensive growth stocks.
Jobs Report Is the Next Big Test
Investors now have their eyes on the US jobs report. The report is due on Friday and could have a major effect on expectations for the Federal Reserve.
Reuters reported that economists expected the US economy to add 56,000 jobs in August, with the unemployment rate at 4.1%.
A weak jobs report could support the view that the economy needs less pressure from high interest rates. That could help stocks. A very strong report could have the opposite effect if investors believe it gives the Federal Reserve more room to raise rates.
The jobs report will therefore be important for both stocks and bonds. It may also decide whether the Nasdaq can keep its recent gains.
What the Nasdaq Rise Means
The 362.90-point rise shows that investors were ready to buy technology and growth shares after recent concerns about rates and bond yields. The move also shows how closely the stock market remains tied to Federal Reserve policy.
The Nasdaq closed at 26,580.73, a gain of 362.90 points, or 1.38%. Lower Treasury yields, softer expectations for a September rate rise and strong results from parts of the technology sector all helped improve market sentiment.
Still, investors cannot assume that the rally will continue without new risks. Oil prices remain high, inflation remains a concern and the Federal Reserve has not ruled out a rate rise.
For now, the Nasdaq has received a clear boost from the latest shift in rate expectations. The next major test will come from the US jobs data and the new inflation figures that follow. Those reports could decide whether this rise marks the start of a stronger recovery or just a short pause after recent market pressure.
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