U.S. stocks rallied sharply Thursday, posting their best day in roughly a month, after Federal Reserve Governor Christopher Waller signaled willingness to hold interest rates steady if inflation continues to improve, easing the market’s fear of a September rate hike.
The Dow Jones Industrial Average rose about 624 points, or 1.18 percent, to 53,686.11. The S&P 500 gained 81 points, or 1.06 percent, to 7,747.71, and the Nasdaq Composite climbed 366 points, or 1.40 percent, to 26,584.06. The advance was led by technology and megacap names, with Microsoft, Apple, Meta, and Nvidia all contributing meaningfully to the gains.
Waller’s dovish tilt was the catalyst. Speaking in prepared remarks, he said the Fed could afford to wait if incoming price data continued to show progress toward the 2 percent target, contradicting the hawkish narrative that had dominated markets earlier in the week. Traders quickly dialed back rate-hike odds, with futures now implying a roughly 55 percent probability of a September pause rather than an increase.
The rally came after three sessions of losses that had pushed investors to question whether the summer equity advance was running out of steam. Thursday’s breadth, with advancers outnumbering decliners by more than two to one on the New York Stock Exchange, suggested the rebound was driven by broad buying rather than a handful of concentrated positions.
Bond markets reflected the same shift. The 10-year U.S. Treasury yield fell several basis points to around 4.75 percent, its biggest one-day drop in weeks, as investors priced out some of the prior hawkish premium. Mortgage-sensitive sectors and real estate investment trusts outperformed, betting that a less aggressive Fed would ultimately support longer-duration assets.
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