Stocks and Bonds Rise as Fed Rate Hike Odds Decline
U.S. stocks rose across major indices, with the S&P 500 up by +0.49%, the Dow Jones Industrial Average gaining +0.76%, and the Nasdaq Composite rising +0.54%. The gains were driven by dovish comments from Federal Reserve Governor Christopher Waller, which reduced expectations for a rate hike at the upcoming September FOMC meeting to 50% from previously 65%. Waller suggested that underlying inflation is better than core numbers indicate and indicated support for keeping rates steady if progress toward the Fed’s 2% goal continues. Bonds also benefited as the yield on the 10-year Treasury note fell by -3 basis points to 4.76%, reflecting reduced rate hike expectations. Positive economic data, including stable jobless claims and a stronger-than-expected ISM services index for August, further supported market sentiment. However, some technology stocks like Broadcom and Hewlett Packard Enterprise declined sharply after disappointing earnings reports. Meanwhile, rising crude oil prices due to ongoing U.S.-Iran tensions raised concerns about inflationary pressures that could delay rate cuts.
