Stocks rally as Waller hints at September rate hold

U.S. stocks rallied broadly at midday Thursday, bouncing off the four-session slide that had dragged the Nasdaq 100 back below its August close, after Federal Reserve Governor Christopher Waller signaled he could back leaving interest rates on hold this month. “If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level,” Waller said.

Traders now price in roughly a 50% probability of a September rate hike, down from about 70% earlier in the week.

That was enough to spark a broad-based relief rally, with the most rate-sensitive corners of the market — software, small caps and anything crypto-linked — leading the bounce.

The yield on the 10-year Treasury note eased to 4.75%, down 4 basis points, after touching 4.81% earlier in the week, its highest level since October 2023.

The rate-sensitive 2-year yield fell 5 basis points to 4.34%, while the 30-year held at 5.23%, down 3 basis points.

The dollar index slid to 99, a near two-week low, with the greenback dropping 2.1% against the yen after a potential new intervention from Tokyo.

That dollar weakness lit a fire under Bitcoin (CRYPTO: BTC), which surged 4.6% to about $80,900, dragging the entire listed crypto complex higher.

The S&P 500 rose 0.96% to 7,740.14, while the Dow Jones Industrial Average outperformed with a 1.1% advance, adding 597 points to 53,658.71.

The Nasdaq 100 climbed 1.0% to 29,439.78.

Within Magnificent Seven stocks, Tesla Inc. (NASDAQ: TSLA ) jumped 7.4%, Meta Platforms Inc. (NASDAQ: META ) added 3.8% and Microsoft Corp. (NASDAQ: MSFT ) rose 3.3%, while Alphabet Inc. (NASDAQ: GOOGL ) gained 1.7%.

Data flow was constructive.

The ISM Services PMI jumped to 55.4 in August from 54.1, beating the 54.3 consensus and marking the strongest services expansion in six months, though the prices-paid subindex spiked to a four-year high of 72.6.

Gold pushed toward the $4,500 handle, rising 2.4% to $4,492 an ounce as the dollar and real yields retreated.

Thursday’s Performance In Major US Indices Index Last % Change MTD YTD S&P 500 7,740.14 +0.96% +0.7% +13.1% Dow Jones 53,658.71 +1.12% +0.9% +11.6% Nasdaq 100 29,439.78 +1.02% -0.1% +16.6% Russell 2000 2,965.05 +0.40% +0.3% +19.5% Updated by 12:20 p.m.

ET According to the Pro platform: The Vanguard S&P 500 ETF (NYSE: VOO ) gained 0.9%.

The SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA ) rose 1.2%.

The Invesco QQQ Trust (NASDAQ: QQQ ) climbed 1.0%.

The iShares Russell 2000 ETF (NYSE: IWM ) added 0.4%.

Crypto Complex Rips As Hike Fears Fade and Food Stocks Get Crushed The Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY ) led all sectors with a 1.8% gain, powered by Tesla.

The Financial Select Sector SPDR Fund (NYSE: XLF ) rose 1.2% and the Technology Select Sector SPDR Fund (NYSE: XLK ) added 1.2%.

At the other end, the Materials Select Sector SPDR Fund (NYSE: XLB ) was the sole meaningful decliner, off 0.6%, with the Consumer Staples Select Sector SPDR Fund (NYSE: XLP ) down 0.2%, the Health Care Select Sector SPDR Fund (NYSE: XLV ) off 0.1% and the Energy Select Sector SPDR Fund (NYSE: XLE ) flat as crude’s advance stalled.

At the industry level, the VanEck Gold Miners ETF (NYSE: GDX ) surged 3.1% on bullion’s move toward $4,500, while the First Trust Dow Jones Internet Index Fund (NASDAQ: FDN ) rallied 2.5% and the SPDR S&P Insurance ETF (NYSE: KIE ) rose 1.8%.

The VanEck Agribusiness ETF (NYSE: MOO ) was the weakest industry group, down 1.1%.

Software was the epicenter of the rally.

Snowflake Inc. (NYSE: SNOW ) soared 21.9% after Wednesday’s post-close print showed fiscal second-quarter product revenue of $1.49 billion, up 37% year-over-year, with third-quarter product revenue guided to $1.59 billion against $1.50 billion consensus.

Management lifted its full-year product revenue forecast to $6.07 billion from $5.84 billion in May and raised its adjusted operating margin target to 14.5% from 13.5%.

The read-through was immediate across enterprise software.

Palantir Technologies Inc. (NASDAQ: PLTR ) jumped 8.3%, Dell Technologies Inc. (NYSE: DELL ) gained 6.9%, ServiceNow Inc. (NYSE: NOW ) rose 6.0%, Oracle Corp. (NYSE: ORCL ) added 5.3% and CrowdStrike Holdings Inc. (NASDAQ: CRWD ) climbed 4.5%.

Crypto-levered equities were the day’s other standout.

Robinhood Markets Inc. (NASDAQ: HOOD ) rallied 14.9% and Circle Internet Group Inc. (NYSE: CRCL ) gained 14.9% back toward $100, with neither name carrying company-specific news in the tape — both moves track bitcoin’s 4.6% advance and the softer dollar.

Strategy Inc. (NASDAQ: MSTR ), the largest corporate bitcoin holder, rose 13.7% on the same mark-to-market impulse, with no fresh disclosure of its own.

Peers Coinbase Global Inc. (NASDAQ: COIN ) and Bullish (NYSE: BLSH ) gained 10.8% and 12.6%, respectively.

Summit Therapeutics Inc. (NASDAQ: SMMT ) surged 14.5% after partner Akeso said the Phase 3 HARMONi-2 trial met its prespecified interim overall survival endpoint, with ivonescimab monotherapy delivering a statistically significant survival advantage over Merck’s Keytruda in PD-L1-positive advanced non-small cell lung cancer.

Merck slipped 0.9% on the news.

Semiconductors were the drag.

Broadcom Inc. (NASDAQ: AVGO ) fell 4.1% despite posting 221% annual revenue growth in its latest fiscal quarter, as the print failed to clear the high end of buy-side expectations.