The Dow Jones Industrial Average jumped 635 points on Thursday, its best day in a month, as Treasury yields pulled back after Federal Reserve Governor Christopher Waller signaled he could support holding interest rates steady this month. Snowflake surged on strong earnings while Broadcom and Ciena fell despite beating estimates.
The Dow Jones Industrial Average climbed 635 points, or 1.2%, putting it on pace for its best day since Aug. 4. The S&P 500 rose 1%, while the Nasdaq Composite traded up 1.3%.
Earlier in the session, the Dow was up 0.9%, the S&P 500 gained 0.6% and the Nasdaq rose 0.9%, according to Investor's Business Daily, with small caps in the Russell 2000 little changed.
Waller signals support for holding rates steady
Federal Reserve Governor Christopher Waller said Thursday he is leaning toward keeping interest rates steady at the Fed's September meeting, provided there are no surprises in upcoming inflation data. According to CNBC: "we are finally seeing some signs of disinflation", Waller said of recent trends, while conceding inflation remains meaningfully above the Fed's 2% target.
Bets among fed funds futures traders that the central bank would raise rates in a couple weeks fell to 50.4% after his remarks, down from 63.2% a day earlier. IBD separately reported that Waller, in a prepared speech, signaled he would be willing to support holding the policy rate at its current level provided inflation data progresses toward the Fed's goal.
Treasury yields ease, yen rallies
The benchmark 10-year Treasury yield last traded around 4.75%, pulling back after hitting its highest level since November 2023 on Wednesday. The Japanese yen also rallied, last trading up 2% against the dollar at 155.47.
Snowflake surges, Broadcom and Ciena slide
Snowflake shares popped more than 19% after the company reported better-than-expected second-quarter earnings and revenue along with strong guidance. Broadcom shares dropped 4% after its latest quarterly results included a disappointing revenue forecast for the fiscal fourth quarter.
Ciena shares plunged nearly 11% despite an earnings beat, according to IBD. The fiber-optic name's fiscal third-quarter earnings jumped 215% to $2.11 per share and sales grew 37% to $1.7 billion, both topping Wall Street's targets, but management's soft margin outlook offset the gains.
Sources: CNBC, Investor's Business Daily
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