US stocks rallied on Thursday as Treasury yields fell and investors grew more confident the Federal Reserve could leave interest rates unchanged this month.
The S&P 500 gained 1.06% to 7,747.71, while the Nasdaq Composite rose 1.4% to 26,584.06. The Dow Jones Industrial Average climbed 624.16 points, or 1.18%, to 53,686.11, recording its strongest session since August 4.
Markets moved higher after Federal Reserve Governor Christopher Waller indicated he would support keeping rates steady if inflation continued to move towards the Fed’s 2% target. However, he left open the possibility of a rate rise if upcoming inflation data proved stronger than expected.
The probability of a 25-basis-point rate increase this month fell to 50.4%, from 63.2% a day earlier and close to 70% earlier in the week. Treasury yields eased in response, with the US 10-year yield falling to around 4.77% after reaching its highest level since November 2023 on Wednesday. Technology stocks participated in the broader rally. Snowflake jumped more than 16% after reporting stronger-than-expected second-quarter earnings and revenue and issuing an upbeat outlook. Broadcom bucked the trend, falling almost 3% after its fourth-quarter revenue forecast disappointed investors.
Oil remained elevated, with WTI crude gaining 0.32% to US$91.30 a barrel, while Brent edged 0.12% lower to US$95.52.
Australian Market Outlook
Australian shares are set to open higher, with S&P/ASX 200 futures up 25 points, or 0.3%, to 9,037. The broad rally on Wall Street and easing global bond yields provide a positive lead for the local market after concerns over inflation and higher interest rates weighed on sentiment earlier in the week. Attention now turns to US inflation figures due next week, which could prove decisive for the Fed’s September meeting. A softer reading could reinforce expectations that rates will remain unchanged, while stronger inflation could revive the prospect of another increase.
