New York, Sep 4: US stocks ended sharply higher on Thursday as falling Treasury yields and easing expectations of an immediate Federal Reserve rate hike encouraged investors to return to equities ahead of the crucial US jobs report.
The S&P 500 gained 1.06 per cent to close at 7,747.71, while the Nasdaq Composite advanced 1.4 per cent to 26,584.06. The Dow Jones Industrial Average jumped 624.16 points, or 1.18 per cent, to 53,686.11, marking its strongest session since August 4.
Investor sentiment improved as the benchmark 10-year US Treasury yield retreated to around 4.77 per cent. The decline followed comments from Federal Reserve Governor Christopher Waller indicating support for keeping interest rates unchanged at the September meeting, provided upcoming inflation data does not deliver a major surprise.
The shift in expectations was also visible in interest-rate markets. The probability of a rate hike at the upcoming Federal Reserve meeting fell to about 50.4 per cent from 63.2 per cent a day earlier, reflecting a reduction in near-term policy tightening bets.
Lower bond yields offered relief to equity markets, particularly growth and technology stocks, which tend to be sensitive to changes in borrowing costs. However, investors remain cautious as crude oil prices continue to trade at elevated levels, keeping inflation risks firmly on the radar.
US benchmark oil prices settled higher, with West Texas Intermediate crude rising 0.32 per cent to $91.30 a barrel, while Brent crude edged down 0.12 per cent to $95.52. Sustained energy prices could complicate the Federal Reserve’s efforts to bring inflation under control and may keep markets volatile.
The technology sector also saw notable stock-specific moves. Snowflake shares surged more than 16 per cent after the company reported stronger-than-expected quarterly results and raised expectations for future growth. Broadcom, however, declined nearly 3 per cent after its latest results were accompanied by a weaker-than-expected revenue outlook.
The upcoming US employment report is now the key focus for investors. A weaker labour market could strengthen expectations of stable or lower interest rates, while stronger-than-expected employment data could revive concerns about inflation and future monetary tightening.
For global markets, the latest Wall Street rally offers some relief after a period of pressure from rising bond yields and energy costs. However, investors are likely to remain sensitive to incoming economic data, Federal Reserve signals and movements in oil prices before making stronger bets on the next direction of US equities.
