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The S&P 500 Index rose Thursday, on track for its best day in a month, as investors weighed remarks from United States Federal Reserve Governor Christopher Waller, who offered optimism that inflation is showing some signs of slowing. Traders pared bets for interest-rate hikes in September.
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The benchmark equities gauge jumped one per cent as of 12:22 p.m. in New York. Waller, earlier in the day, said his next decision on interest rates will be “heavily influenced” by August inflation data due next week. The technology-heavy Nasdaq 100 Index rose 1.1 per cent, heading for its biggest gain in a week, with broader gains still kept in check after chip stocks dropped following Broadcom Inc.’s earnings.
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Broadcom shares fell 4.1 per cent after the chipmaker’s results and forecast were seen as underwhelming, even as it predicted a boom in artificial intelligence chip sales over the next two years. An exchange-traded fund tracking chip names slipped 0.4 per cent, after falling as much as 2.4 per cent earlier. Nvidia Corp. rose 1.3 per cent after agreeing to acquire artificial intelligence startup Hugging Face in a transaction valued at about US$13 billion.
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“It is safe to conclude that the AI data-centre boom persists,” said Louis Navellier, chief investment officer at Navellier & Associates. “As the fall arrives and the weather cools, I expect that the stock market will heat up, since another round of record earnings is expected to be announced.”
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Among single-stock movers, Snowflake Inc. rallied 21 per cent, on track for its best day since late May, after the software company’s quarterly results beat expectations and it raised its full-year forecast for product revenue. Hewlett Packard Enterprise Co. fell five per cent, heading for its biggest drop since late July, after reporting increasing sales that didn’t meet high expectations from investors.
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Investors are gearing up for Friday’s jobs report for clues on the Fed’s path for interest rates. Economists estimate that the employment report, due at 8:30 a.m. in Washington on Friday, will show U.S. employers added 55,000 jobs in August. Such a result would be broadly in-line with average job growth this year.
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The S&P 500 is projected to swing just 0.7 per cent in either direction on Friday, in line with the average realized move on jobs-report days over the past 12 months, options-market data compiled by Citigroup Inc. show. Stuart Kaiser, the firm’s head of U.S. equity trading strategy, says Friday’s implied move, based on prices of S&P 500 option straddles as of Tuesday’s close, is too low.
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Data released Thursday showed initial jobless claims for the period through Aug. 29 were broadly in line with estimates. Meanwhile, the U.S. service sector expanded in August by the most in six months, bolstered by strong demand and a pickup in business activity.
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Nine of the 11 sectors in the S&P 500 rose on Thursday, led by gains in consumer discretionary and communication services while materials fell. Wall Street’s chief fear gauge — the Cboe Volatility Index remained below 15 — a level that doesn’t typically signal market stress.