Wall Street's major benchmark averages finished higher on Thursday (Friday AEST) as investors scaled back expectations for a Federal Reserve rate hike after Fed Governor Christopher Waller said he would support keeping interest rates unchanged if incoming data confirms inflationary pressures are easing.
The Dow Jones Industrial Average rose 624.2 points, or 1.2%, to 53,686.1, while the S&P 500 gained 81.1 points, or 1.1%, to 7,747.7. The Nasdaq Composite advanced 366.2 points, or 1.4%, to 26,584.1.
All three major indexes remained on track for weekly gains.
Waller told Reuters he would be inclined to leave interest rates unchanged if upcoming data confirms that price pressures are moderating, while adding that he would support a rate hike if inflation fails to cool.
Following his comments, markets reduced expectations for a Fed rate hike at the September meeting, with the implied probability falling to 50.2% from 63.2% on Wednesday, according to the CME Group FedWatch Tool.
Nvidia rose 1.8% after announcing plans to acquire developer platform Hugging Face for US$12.9 billion, in a move that strengthens its position in the artificial intelligence ecosystem and increases competition with OpenAI and Anthropic.
Broadcom, however, fell 2.7% after issuing a weaker-than-expected fourth-quarter revenue forecast.
Snowflake surged 16.6% after forecasting strong annual revenue growth, lifting sentiment across the software sector. ServiceNow, Salesforce and Adobe gained between 2.1% and 6.5%.
On the data front, investors were encouraged by a decline in jobless claims and stronger activity in the services sector.
Investors now await Friday's August employment report from the Labor Department, which is expected to show the U.S. economy added 56,000 jobs last month, with the unemployment rate holding at 4.1%.
On the bond markets, 10-year and two-year Treasury yields fell 0.2% and 0.7%, respectively, to 4.772% and 4.34%.
