Stocks, Bonds Rise as Fed-Hike Bets Ease on Waller: Markets Wrap
(Bloomberg) — Stocks rose and bond yields fell as Federal Reserve Governor Christopher Waller said he’d be willing to support holding rates steady if price pressures continue to show signs of easing.
Money markets pared bets on a September Fed hike. Short-dated Treasuries outperformed. The S&P 500 saw back-to-back gains. The dollar slipped. The yen jumped as traders boosted wagers on Japanese rate increases and were on high alert to the risk of intervention. Oil climbed as Iran claimed retaliatory strikes and Israel warned it’s ready to intensify its role in the war.
“If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level,” Waller said Thursday at an event hosted by Reuters. “But if inflation comes in hot, I would consider a rate hike.”
Waller has reaffirmed data-dependence and given an optimistic assessment of recent inflation progress heading into the final inflation report before the September meeting, according to Krishna Guha at Evercore.
“We repeat our call that the Fed is more likely to hold than hike in September, though we think it is close and will indeed turn on the next set of inflation data,” Guha said.
Fed officials will meet again on September 15-16 after leaving rates steady for five straight meetings this year. Waller said he expects upcoming jobs data to confirm the labor market is in a satisfactory state.
US payrolls growth got back on track in August, consistent with general steadiness in the labor market that’s helping the Fed focus more intently on its battle with inflation. Economists estimate the monthly jobs report Friday will show a 55,000 increase in payrolls after an unexpected dip in July employment. Such a result would be broadly in line with average job growth this year.
“A Goldilocks report will help reduce rate hike concerns, which should lower yields and that could spark a solid rebound in stocks,” said Tom Essaye at The Sevens Report. “Conversely, a ‘too hot’ report will only further reinforce fears of more rate hikes and we can expect yields to rise and stocks to drop.”
The S&P 500 is projected to swing 0.7% in either direction on Friday, in line with the average realized move on jobs-report days over the past 12 months, options-market according to data compiled by Citigroup Inc.
Meantime, the US service sector expanded in August by the most in six months, bolstered by strong demand and a pickup in business activity. The trade deficit widened sharply in July to the largest since early 2025, reflecting a surge in imports of computers and other technology equipment.
Corporate Highlights:
Nvidia Corp. has agreed to acquire artificial intelligence startup Hugging Face in a transaction valued at about $13 billion. Broadcom Inc.’s forecast disappointed investors, a sign it’s getting a slower payoff from the AI boom than some anticipated. Snowflake Inc. raised its outlook for annual sales, topping estimates, and touted rapid adoption of its AI-assisted coding tool. Hewlett Packard Enterprise Co. reported increasing sales that didn’t meet high expectations from investors. Victoria’s Secret & Co. boosted guidance, but showed a slower pace of growth. Campbell’s Co. posted its fourth straight quarterly sales decline, cut its dividend and unveiled a cost-savings plan. Tyson Foods Inc. again cut its outlook for the fiscal year, in the latest signal that the beef industry’s pains amid a shrinking US cattle herd are far from over. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 10:07 a.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.4% The MSCI World Index rose 0.6% Currencies
The Bloomberg Dollar Spot Index fell 0.5% The euro rose 0.3% to $1.1624 The British pound rose 0.2% to $1.3514 The Japanese yen rose 2.1% to 155.44 per dollar Cryptocurrencies
Bitcoin rose 2% to $78,927.45 Ether rose 1.7% to $2,433.42 Bonds
The yield on 10-year Treasuries declined two basis points to 4.75% Germany’s 10-year yield declined three basis points to 3.35% Britain’s 10-year yield declined seven basis points to 5.16% Commodities
West Texas Intermediate crude rose 1.2% to $92.12 a barrel Spot gold rose 2.1% to $4,472.42 an ounce ©2026 Bloomberg L.P.
