S&P 500, Dow End Best Day In A Month On Calmer Yields As Rate Hike Bets Wane — SPCX, VSXY, NVDA, TSLA In Focus

• The S&P 500 ended Thursday 1.1% higher, while the Nasdaq 100 added 1.2% and the Dow Jones Industrial Average gained 1.2%.
• The benchmark 10-year Treasury yield hovered around 4.77%.
• Microsoft released its Azure revenue data for the first time.

U.S. stock indices ended higher on Thursday after Federal Reserve Governor Christopher Waller’s inclination to leave rates unchanged calmed rate-hike jitters, pushing yields lower. 

The S&P 500 ended Thursday 1.1% higher, while the Nasdaq 100 added 1.2% and the Dow Jones Industrial Average gained 1.2%. The Russell 2000, which tracks stocks with small market capitalizations, rose about 1.3%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) rose 1%, and Invesco QQQ Trust (QQQ) ended Thursday 1.1% higher, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was up 1%.

Meanwhile, the VanEck Semiconductor ETF (SMH) added 0.2%, while the iShares Semiconductor ETF (SOXX) rose 0.1%. The broader Vanguard Information Technology ETF (VGT) rose 1.4%, tracking gains from Strategy (MSTR) and Circle Internet (CRCL) after Bitcoin prices topped $80,000.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bearish’ with ‘high’ message volumes. 

US Market Drivers

Federal Reserve Governor Christopher Waller said on Thursday that he is inclined to advocate for leaving the central bank’s target interest rate unchanged at its upcoming policy meeting, contingent on incoming inflation data showing continued progress toward the Fed's 2% target. 

During a Reuters NEXT Newsmaker appearance in Washington, Waller clarified that his September policy decision hinges on inflation data scheduled for release over the next fortnight.

While noting that the current benchmark rate of 3.50% to 3.75% offers modest demand restriction, Waller warned that additional hikes remain on the table should price metrics pivot higher, especially as Middle Eastern geopolitical instability pressures market sentiment.

According to the CME FedWatch Tool, which estimates probabilities based on 30-day Federal Funds futures pricing, the likelihood of a 25-basis-point rate hike at the September meeting dropped to roughly 50%, down from nearly 60% earlier in the week. 

“Fed Chair Warsh has told us that he’s focused on inflation than on payrolls, so even if we get a weak payrolls number tomorrow, that probably will not change his position. If we get a strong one, that could sort of confirm his concern,” Sam Stovall of CFRA Research told CNBC. “You can’t really say that the all-clear has been signaled.” 

Key Trending Stocks

SpaceX (SPCX): The rocket maker has rejoined the elite roster of $2 trillion public companies, rebounding from a volatile summer trading stretch. 

Victoria’s Secret & Co. (VSXY): The company delivered a sharp increase in second-quarter profits and raised its full-year financial outlook, demonstrating that its corporate turnaround plan continues to gain traction.  

Tesla (TSLA): Shares jumped about 7% on Thursday, trading near $382, as investors piled in ahead of the company’s Cybercab launch event in Austin. 

Nvidia (NVDA): The chipmaker made a major bet on open-source AI after agreeing to acquire Hugging Face for $12.93 billion, with CEO Jensen Huang pledging to keep the widely used AI platform open to developers. 

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