Wall Street moved sharply higher on Thursday as investors returned to stocks after several volatile sessions.
Sentiment improved as US Treasury yields declined and Federal Reserve Governor Christopher Waller delivered less hawkish comments on interest rates. Software stocks also helped lift the broader market.
Dow, S&P 500 and Nasdaq Rise More Than 1%
At 12:14 ET, the Dow Jones Industrial Average gained 1.1% to 53,642.33.
The S&P 500 rose 1% to 7,743.36, while the Nasdaq Composite climbed 1.4% to 26,580.03.
The rally came as investors reacted positively to lower Treasury yields and renewed strength in technology shares.
Treasury Yields Retreat From Recent Highs
Bond markets have experienced heavy selling in recent weeks, pushing yields to multi-year highs.
Investors have been concerned about persistent inflation, elevated oil prices, growing government debt and heavy borrowing linked to artificial intelligence infrastructure spending.
Earlier in the week, the benchmark US 10-year Treasury yield reached its highest level since November 2023. The 2-year yield also climbed to its highest point since July 2024.
However, yields began to ease on Wednesday and fell further on Thursday.
The 10-year Treasury yield dropped around 5.2 basis points to 4.742%, while the 2-year yield declined 5.6 basis points to 4.330%.
Fed Governor Waller Supports Market Sentiment
Comments from Federal Reserve Governor Christopher Waller helped improve investor confidence.
Waller said recent economic data showed signs that inflation may finally be easing.
He added that if the trend continues, he would be inclined to support keeping the federal funds rate unchanged at the next policy meeting.
His comments were less hawkish than those delivered by Fed Chair Kevin Warsh at Jackson Hole the previous week.
Lower interest-rate expectations helped reduce pressure on stocks.
Jobs Report Becomes the Next Major Catalyst
Investors are now turning their attention to Friday’s US nonfarm payrolls report.
Recent labor market indicators have shown some signs of weakness, although the broader employment picture remains relatively resilient.
A softer jobs report could complicate the Federal Reserve’s policy outlook by increasing concerns about employment while inflation remains above target.
Markets will also closely watch upcoming inflation data for further clues on the direction of interest rates.
Software Stocks Rally as Snowflake Surges
Software shares were among the strongest performers on Thursday.
The iShares Expanded Tech-Software Sector ETF rose around 3.7%.
Snowflake shares surged nearly 21% after the cloud data company raised its annual product revenue guidance.
CEO Sridhar Ramaswamy said artificial intelligence was creating a powerful growth effect across Snowflake’s business.
The strong reaction helped lift sentiment across the broader software sector.
Broadcom Falls After Weak Revenue Guidance
Broadcom moved in the opposite direction.
Shares fell about 4.1% after the semiconductor company issued current-quarter revenue guidance below Wall Street expectations.
Broadcom remains an important player in custom AI chips and infrastructure software.
The company competes with Nvidia, Marvell, Qualcomm and AMD, particularly as large technology companies seek alternatives to Nvidia’s processors.
Nvidia Confirms $12.93 Billion Hugging Face Deal
Nvidia also remained in focus after confirming an agreement to acquire Hugging Face.
The company said it would pay $12.93 billion for the open-source AI platform.
Hugging Face serves more than 18 million developers, researchers and creators.
Nvidia CEO Jensen Huang said the platform would remain open to the broader artificial intelligence ecosystem following the acquisition.
Oil Prices Remain Elevated Amid Middle East Tensions
Oil markets remained under pressure from escalating tensions between the United States and Iran.
The latest developments marked the sharpest increase in tensions between the two countries since July.
Iranian state media reported drone and missile attacks against US bases in Kuwait. Kuwait also said Iran had carried out aggressive actions early Thursday.
President Donald Trump suggested that the latest escalation may not last for an extended period.
Brent and WTI Hold Strong Weekly Gains
Despite the geopolitical uncertainty, oil prices moved only slightly during Thursday’s session.
Brent crude futures slipped 0.2% to $95.50 a barrel, while US West Texas Intermediate crude rose 0.3% to $91.24.
However, both benchmarks remained on track for strong weekly gains.
Brent was up around 8% for the week, while WTI had gained approximately 9.4%.
Wall Street Rally Supported by Lower Rates
Overall, the decline in Treasury yields provided much-needed relief for US equities.
Lower yields helped support technology stocks, while Waller’s comments reduced concerns about an immediate Federal Reserve rate increase.
Investors are now focused on the upcoming jobs report and inflation data, which could determine whether the latest Wall Street rally has room to continue.
