All three major US stock indexes closed higher on Thursday as Treasury yields pulled back around the world, easing worries that had been building over a possible Federal Reserve rate hike this month.
The Dow Jones Industrial Average rose 1.2 percent, or 624.16 points, to close at 53,686.11, with 23 of its 30 components finishing higher. The Nasdaq Composite advanced 1.4 percent, or 366.23 points, to 26,584.06, lifted by strong performance among technology stocks. The S&P 500 gained 1.1 percent to finish at 7,747.71, with 9 of its 11 sectors ending in positive territory. Materials and communication services led the gains, each rising more than 1 percent.
The rally followed comments from Fed Governor Christopher Waller, who said he would prefer to hold the Fed's benchmark rate steady at the September meeting unless upcoming inflation data delivers a significant surprise. After his remarks, the yield on the 10 year Treasury note fell to 4.77 percent from 4.818 percent the prior day, a level that had been the highest since November 2023. Yields in Japan also eased. Lower yields tend to make stocks more attractive relative to bonds, and technology and growth focused shares in particular have been sensitive to the direction of long term rates this year.
The moves capped a choppier stretch for markets that had seen stocks pressured earlier in the week by both elevated bond yields and rising oil prices tied to renewed fighting involving Iran. Strong corporate earnings, including beats from Snowflake and Hewlett Packard Enterprise, also supported sentiment. Heading into Friday, futures for markets in Japan, South Korea, and Australia pointed higher, tracking the Wall Street gains, while the dollar slipped to its lowest level since May and traders scaled back bets on a Fed rate increase this month.
Friday's August jobs report will be closely watched for any signal that could shift the odds around this month's Fed meeting.
Why did stocks rise on Thursday?
Falling Treasury yields, driven by a Fed governor's comments favoring steady rates, along with strong corporate earnings, boosted investor sentiment.
What had been pressuring markets earlier in the week?
Elevated bond yields and rising oil prices linked to renewed Iran related hostilities had weighed on stocks.