NEW YORK, Sept. 3 (Xinhua) -- U.S. stocks surged on Thursday as remarks from Federal Reserve Governor Christopher Waller pointing to easing price pressures prompted investors to pare back expectations of an interest rate increase.
The Dow Jones Industrial Average rose 624.16 points, or 1.18 percent, to 53,686.11. The S&P 500 added 81.11 points, or 1.06 percent, to 7,747.71. The Nasdaq Composite Index increased by 366.23 points, or 1.4 percent, to 26,584.06.
Eight of the 11 primary S&P 500 sectors ended in the green, with consumer discretionary and financials leading the gainers by rising 1.58 percent and 1.55 percent, respectively. Energy and materials led the laggards, falling 0.72 percent and 0.46 percent, respectively.
Market sentiment improved after Waller stated he observed promising signs of disinflation across the U.S. economy, indicating he could support maintaining benchmark interest rates at current levels at the Fed's next session. The signal led bond traders to sharply reduce the probability of a September rate hike to a toss-up, down from a 63-percent likelihood priced in just a day earlier.
"Kevin Warsh's Jackson Hole speech has shifted the Federal Reserve's position from hold unless you have to hike, to hike unless you can justify a hold," wrote James Knightley, chief international economist at ING. "While our macro projections suggest the Fed can afford to be patient, the shift in stance indicates an appetite for a hike to help ensure inflation returns to target. We see no need for a series of hikes."
On the macroeconomic front, executive outplacement firm Challenger, Gray & Christmas reported a slowdown in planned job cut announcements in August, underscoring persistent "low hire, low fire" dynamics within the U.S. labor market. Meanwhile, the Department of Labor reported that initial claims for state unemployment benefits ticked up to 206,000 last week, slightly exceeding consensus estimates.
In corporate developments, Nvidia gained 1.8 percent following an announcement that it will acquire open-source AI platform Hugging Face for approximately 13 billion U.S. dollars, with the transaction expected to finalize in 2027. Electric vehicle maker Tesla and aerospace firm SpaceX both jumped more than 5 percent.
Corporate earnings drew substantial investor attention as cloud data platform Snowflake skyrocketed 16.55 percent after reporting second-quarter revenue and earnings that beat Wall Street estimates and issuing strong forward guidance. Semiconductor manufacturer Broadcom edged lower despite reporting top- and bottom-line beats. Post-bell focus turned toward quarterly disclosures from athletic apparel retailer Lululemon Athletica and electronic signature provider DocuSign.
While renewed military conflict in the Middle East continues to keep crude prices and headline inflation risks elevated, market participants are increasingly centering on labor conditions. Thursday's hiring data sets the stage for the Labor Department's high-stakes August nonfarm payrolls report due Friday morning.
