Dow Jones Surges on Easing Rate Hike Expectations, Waller's Comments
The Dow Jones Industrial Average (DJIA) has risen by 1.21% on Thursday, following easing interest rate hike expectations and Treasury yields.
Fed Governor Christopher Waller stated that he would be 'inclined to support holding the target for the federal funds rate at its current setting' if inflation continues to ease, which led to a decrease in the odds of a 25-basis-point hike at the September 16 Federal Open Market Committee (FOMC) meeting from 63.2% to 50.3% on the CME FedWatch tool.
The 10-year Treasury yield has dropped by five basis points to 4.744%, while the 30-year yield is down three basis points to 5.228%. Waller also mentioned that he would support raising rates if inflation data comes in hotter than expected, citing the next major inflation reading as the Consumer Price Index (CPI) on September 11.
The escalating U.S.-Iran tensions have had a limited impact on investors, with Snowflake's strong earnings report and Microsoft and Salesforce's price increases driving tech sector growth. Goldman Sachs and Walmart are also contributing to the index's gains, while McDonald's has trended lower since its second-quarter earnings on August 4.