Waller's Dovish Comments Fuel Modest US Stock Rally Ahead of NFP Report
US stocks are set to open modestly higher today, following dovish comments from Federal Reserve Governor Christopher Waller. In an effort to calm inflation fears and lower rate hike expectations, Waller noted that recent data points to some signs of disinflation.
The market quickly reacted by reducing September rate hike expectations to 50%, down from 63% just a day ago. This puts even more focus on today's nonfarm payroll report, which is expected to show 56,000 jobs were added in August after a shock fall of 23,000 in the previous month.
The unemployment rate is expected to hold steady at 4.1%. Weaker-than-expected jobs data could see the market lower rate hike expectations further for this month. On the other hand, should the NFP show more than 100,000 jobs were created, this could ramp up rate hike expectations.