Waller's Rate Hike Hint Boosts US Stocks
The US stock market closed higher on Thursday, following Federal Reserve Governor Christopher Waller's hint at keeping interest rates unchanged. The S&P 500 rose 1.1%, while the Nasdaq 100 added 1.2% and the Dow Jones Industrial Average gained 1.2%. The benchmark 10-year Treasury yield hovered around 4.77%.
Waller emphasized that his decision on keeping interest rates unchanged at the upcoming policy meeting depends on incoming inflation data showing continued progress towards the Fed's 2% target. He noted that the current benchmark rate of 3.50% to 3.75% offers modest demand restriction, but warned that additional hikes remain on the table if price metrics pivot higher.
The likelihood of a 25-basis-point rate hike at the September meeting dropped to roughly 50%, down from nearly 60% earlier in the week, according to the CME FedWatch Tool. Despite this, investors remained cautious, with retail sentiment on Stocktwits for key ETFs remaining 'bearish'.
Among notable stocks, Tesla shares jumped about 7% as investors piled in ahead of the company's Cybercab launch event in Austin. Nvidia made headlines after agreeing to acquire Hugging Face for $12.93 billion, with CEO Jensen Huang pledging to keep the widely used AI platform open to developers.