U.S. stocks closed higher on Thursday, with the Nasdaq Composite leading the advance, after Federal Reserve Governor Christopher Waller signaled openness to pausing interest rate increases. The tech-heavy index ended the session up 1.40% at 26,584.06, buoyed by a pullback in Treasury yields and strong gains in rate-sensitive growth stocks.
The market's positive tone was set early in the day, as Waller, speaking at a Reuters event, noted that recent inflation data showed a slowdown. Three-month core inflation eased to 3.05% by July, down from 4.76% in February. If this trend continues, Waller indicated he could support keeping rates unchanged, saying, "Give disinflation a chance."
The 10-year Treasury yield slipped to around 4.76% from 4.79%, while the two-year yield fell to 4.33% from 4.39%. Lower yields typically benefit growth-oriented sectors like technology, which rely on future cash flows.
The S&P 500 climbed 1.06% to close at 7,747.61, while the Dow Jones Industrial Average advanced 1.18%. The gains were led by financials, technology, and consumer discretionary sectors, with the Financial Select Sector SPDR Fund (XLF) up 1.54%, technology (XLK) rising 1.30%, and consumer discretionary (XLY) adding 1.39%. In contrast, energy, materials, and staples declined, with energy (XLE) falling 0.69%.
Market breadth was positive, with advancing stocks on the Nasdaq outnumbering decliners by a ratio of 1.34 to 1. At the close, 3,761 securities were higher, 2,802 were lower, and 567 were unchanged.
In corporate news, Microsoft (MSFT) advanced 2.68%, Meta Platforms (META) climbed 3.01%, and Nvidia (NVDA) gained 1.80% following its agreement to acquire Hugging Face for $12.93 billion. Snowflake (SNOW) surged 16.58% after strong earnings, while Broadcom (AVGO) fell 2.75% and Tyson Foods (TSN) dropped 7.25%.
Investors now look ahead to Friday's August jobs report, due at 08:30 EDT, and the August consumer price index, scheduled for September 11. A stronger-than-expected payrolls number or a hotter inflation reading could reignite rate hike expectations, while rising oil prices remain a concern, with crude near $91 per barrel.
Thursday's late-session calm, with SPY easing 0.04% and QQQ dipping 0.08% in the final hour, suggests traders are still cautious, awaiting further economic signals.
