PiCK
Wall Street Rises After Waller Signals Possible Rate Hold; Nasdaq Jumps 1.4%
Summary
- Christopher Waller's remarks on the possibility of a rate hold helped lift Wall Street and revive risk appetite.
- According to CME FedWatch, the probability of a benchmark rate hold in September rose to 49.5% from 36.8%, bringing it nearly level with expectations for a rate increase.
- A recovery in risk appetite spread across the digital-asset market and technology stocks, with Bitcoin (BTC) rising more than 5% to break above $81,000.
Forecast Trend Report by Period
U.S. stocks rallied across the board on Sept. 3 as worries about a Federal Reserve rate increase this month eased. Risk appetite improved after Fed Governor Christopher Waller left the door open to holding rates steady if inflation continues to cool, pushing Treasury yields lower.
The Dow Jones Industrial Average rose 624.16 points, or 1.18%, to 53,686.11 at the close on the New York Stock Exchange. The S&P 500 gained 1.06% to 7,747.71, while the tech-heavy Nasdaq climbed 1.40% to 26,584.06.
Remarks from Fed officials helped turn the market higher. Waller said he could support keeping rates unchanged at the Federal Open Market Committee's September meeting if August inflation data show further easing in price pressures.
John Williams, president of the Federal Reserve Bank of New York, said the recent jump in U.S. Treasury yields reflected a resilient economy rather than strains in market functioning. He added that inflation trends still need to be monitored.
Market pricing for September shifted quickly. CME FedWatch showed the probability of a rate hold rising to 49.5% from 36.8% a day earlier. That left it nearly even with expectations for another rate increase, which had recently been the prevailing view.
Bond and currency markets also reacted. The 10-year Treasury yield fell 0.03 percentage point from the previous session to 4.761%, while the policy-sensitive two-year yield dropped 0.05 percentage point to 4.332%. The dollar index slipped about 0.5% to its lowest level since Aug. 26.
The rebound in risk appetite also spread to digital assets. Bitcoin rose more than 5% and climbed above $81,000.
Technology stocks were mostly higher. Snowflake surged 16.55% after issuing stronger annual revenue guidance, while Nvidia gained 1.8% on news of its acquisition of AI model platform Hugging Face. Broadcom, by contrast, fell 2.74% after forecasting fourth-quarter revenue below market expectations.
Investor focus is now shifting to the U.S. Labor Department's August employment report due Sept. 4. If the data neither fuel fears of a sharp slowdown nor signal overheating, concerns about further rate increases could ease further.
