U.S. stocks rally as pressure for a Fed rate hike eases, Dow gains 624 points

U.S. stocks climbed sharply Thursday as investors became more hopeful that the Federal Reserve could leave interest rates unchanged this month. The Dow Jones Industrial Average rose 624.16 points, or 1.18%, marking its strongest session since August 4.

The S&P 500 gained 1.06% and the Nasdaq Composite advanced 1.4%. The Philadelphia Semiconductor Index rose 0.11%, while Taiwan Semiconductor Manufacturing Co.’s American depositary receipts gained 0.36% to close at $417.01.

Oil prices had recently pushed U.S. Treasury yields higher, fueling concern that inflation could force the Fed to raise rates. Those expectations eased after Fed Governor Christopher Waller said on September 3 that he would support keeping the federal funds target rate unchanged if data showed inflationary pressure was subsiding. The Japanese yen also strengthened, and Treasury yields fell, helping support stocks.

The CME FedWatch tool showed traders pricing a 50.4% chance of a near-term rate hike, down from 63.2% the previous day. Corporate moves added to the market’s momentum. Nvidia gained 1.8% after announcing plans to buy developer platform Hugging Face for $12.9 billion, while Broadcom fell 2.7% after giving a fourth-quarter revenue outlook below expectations. Snowflake surged 16.6% after reporting second-quarter results and forecasting strong annual revenue, boosting confidence in the software sector.

The Dow closed at 53,686.11, the Nasdaq at 26,584.06 and the S&P 500 at 7,747.71. The Philadelphia Semiconductor Index ended at 11,352.13.

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If the data show that inflationary pressure is easing, I will support keeping the federal funds target rate unchanged