U.S. equities advanced on Thursday as investors positioned for a potential pause in Federal Reserve interest-rate hikes at the central bank’s September meeting.
The Dow Jones Industrial Average rose 0.8% to 53,504, while the S&P 500 gained 0.5% to 7,712. The Nasdaq Composite climbed 0.8% to 26,428. Bond yields eased, providing support to risk assets. Fed Governor Christopher Waller said further progress toward the U.S. central bank’s 2% inflation target could warrant another rate pause, reducing market expectations of a September hike to 54% from 62% before his remarks. The shift followed weeks of rising bets on higher rates amid elevated energy prices and Middle East tensions.
Software stocks led gains after Snowflake surged 21.5%, its highest valuation since December 2021, following a strong earnings outlook. The cloud-data platform raised its annual product revenue forecast, reinforcing investor confidence in AI-driven spending as a growth driver. ServiceNow and Salesforce also advanced, up 6.1% and 3.1%, respectively. Broadcom and Hewlett Packard Enterprise lagged after disappointing outlooks, with shares falling 4% and 9%. Campbell Soup and Victoria’s Secret also underperformed, declining 6% and 11% on weak guidance.
The Swiss Market Index (SMI) fluctuated, ending 0.2% higher after opening 0.5% up, as Nestlé fell 1%. The index showed limited directional momentum, supported by overnight cues from U.S. and Asian markets and stabilized oil prices. The euro traded at 0.9384 francs, down from 0.9410 earlier, after Swiss inflation data exceeded forecasts. The Swiss National Bank faces renewed pressure to address inflation risks.
Geopolitical risks in the Middle East continued to weigh on sentiment, with oil prices rising again after a brief lull, reigniting inflation concerns. Traders cited the absence of fresh escalations as a stabilizing factor, though risks remain elevated. U.S. President Donald Trump described recent strikes on Iran as short-lived, while Iran launched attacks on Kuwait, a U.S. ally. U.S. Defense Secretary Pete Hegseth extended troop deployments in the region.
Market focus now shifts to Friday’s U.S. jobs report, which could influence the Fed’s policy path. Economists at Helaba noted that a strong payrolls reading might encourage officials to raise rates sooner. Futures on the Dow Jones were little changed, while Nasdaq 100 futures slipped 0.2%.
Among individual stocks, Roche gained 1.8% to lead SMI advancements, while Richemont fell 2.4% as luxury sector weakness persisted. Logitech rose 2.6% in a tentative recovery, and Givaudan climbed 1.5% following a Deutsche Bank upgrade. Partners Group and Amrize also stabilized, up 2.0% and 1.2%, respectively, after recent declines. Ultragenyx Pharmaceutical plunged 46% after its rare-disease drug failed a Phase 3 trial, while Victoria’s Secret dropped 20% on weak revenue and guidance for 2026.
