Dow jumps 627 points as Fed rate-hike odds ease

The Dow Jones Industrial Average climbed 627.37 points to 53,689.32 on Thursday. The S&P 500 gained 81.67 points to 7,748.27 and the Nasdaq Composite rose 366.39 points to 26,584.21.

Markets moved after Federal Reserve Governor Christopher Waller indicated he would favor keeping interest rates unchanged if upcoming data confirms easing inflation pressures. Fed funds futures trimmed the probability of a September rate increase to about 50.4% from 63.2% a day earlier, based on the CME FedWatch tool. The benchmark 10-year Treasury yield fell to about 4.77% after hitting its highest level since November 2023 the previous day. The Japanese yen strengthened roughly 2% to about 155.51 per dollar.

Technology and artificial intelligence-related stocks were among the biggest contributors to the rally. Nvidia shares rose after the company disclosed a $12.9 billion agreement to acquire developer platform Hugging Face. Snowflake surged more than 20% after reporting second-quarter results with revenue above expectations and issuing strong guidance. Software names including ServiceNow, Salesforce and Adobe also finished higher. Broadcom fell about 2% after warning fiscal fourth-quarter revenue would be weaker than analysts expected.

Energy prices remained elevated, with West Texas Intermediate crude trading above $91 a barrel and Brent near $95. Higher oil prices are a potential source of upward pressure on inflation and may affect monetary policy decisions.

Economic releases on Thursday showed continued strength in labor markets, with initial jobless claims remaining low, and an acceleration in services-sector activity. Services-sector input prices rose to their highest level since October 2022. The U.S. international trade deficit widened 24.4%.

Crypto-related stocks joined the rally as Bitcoin rebounded after two sessions of losses. Coinbase Global and Robinhood Markets posted notable gains alongside the broader recovery in digital assets. The major indexes were on track for weekly gains, with the Nasdaq helped by strength among large-cap technology names.

Investors were focused on Friday’s monthly employment report for additional clues on the Fed’s path. Economists expect the Labor Department to report the U.S. added about 56,000 jobs in August and that the unemployment rate held at 4.1%.