Wall Street ended solidly higher on Thursday as investors jumped back into stocks after several turbulent sessions. The S&P 500 advanced 1.1% to settle at 7,747.71, the Dow Jones Industrial Average rose 1.2% to close at 53,685.52, and the Nasdaq Composite surged 1.4% to finish at 26,584.06. It was the best single-day performance for all three indices in a month, driven by a slide in Treasury yields and Fed Governor Waller’s comments supporting a rate hold.

Nine of eleven S&P 500 sectors rose on the day, led by consumer discretionaries and financials, both up 1.6%. Energy was the weakest sector, down 0.7%. Among individual stocks, Robinhood surged 16%, Palantir gained 8%, and Oracle climbed 6%. Software stocks caught a broad bid, with the iShares Expanded Tech-Software Sector ETF closing 3.4% higher, lifted by a 16% jump in Snowflake after the cloud data platform raised its annual product revenue guidance. On the flip side, Broadcom lost 2.7% after issuing current-quarter revenue guidance that missed consensus estimates.

S&P 500 daily changes through August–September 2026 — Thursday’s 1.1% gain was the strongest session since early August. Source: Bloomberg

In the mega-cap space, Nvidia confirmed it had agreed to buy open-source AI platform Hugging Face for nearly $13 billion. CEO Jensen Huang said Hugging Face would remain an open platform, while the three co-founders — Clem Delangue, Julien Chaumond and Thomas Wolf — will each have a net worth of about $1.8 billion once the deal closes. Nvidia shares rose about 2% to $229.88, adding roughly $132 billion to its $5.5 trillion market value.

Global stock indices — day and 5-day performance. U.S. indices led gains; Nikkei fell 3.3% on yen strength while China A50 dropped 1.03% over 5 days.

The big story for the last few weeks has been an extended rout in bond markets in the U.S. and globally, with yields surging to multi-year highs and lifting borrowing costs across the board. On Tuesday, the benchmark U.S. 10-year yield hit its highest level since November 2023, while the 2-year reached its highest since July 2024. The drivers include inflation jitters amid elevated oil prices, fears about unsustainable debt issuance to fund AI infrastructure build-outs, and ballooning fiscal debt.

Fed Governor Waller’s comments on Thursday marked a less hawkish tone than Fed Chair Kevin Warsh’s speech at the annual Jackson Hole conference last week. “While inflation remains meaningfully above the FOMC’s 2 percent goal, recent data suggest we are finally seeing some signs of disinflation,” Waller said at a Reuters NEXT interview in Washington. “If this continues in the data due over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting.” He added that if inflation comes in hot, he would consider a rate hike.

The remarks moved markets sharply. Swap contracts repriced to roughly even odds of a quarter-point increase at the September 15–16 meeting, down from about 70% earlier in the week. The 2-year Treasury yield fell 5.4 basis points to 4.332%, while the 10-year eased 3.9 bps to 4.755%. In Europe, Germany’s 10-year Bund yield declined for the first time in seven sessions, slipping to 3.362% after touching its highest level since 2011. French sovereign borrowing costs, however, continued to rise for a seventh straight session as fiscal deficit anxieties persisted.

All eyes now turn to the August non-farm payrolls report on Friday. Economists estimate a 55,000 rise in payrolls after an unexpected dip in July, with the unemployment rate expected to hold at 4.1%. Recent labour market indicators have been soft — ADP private payrolls showed just 38,000 jobs added in August, missing consensus — but the overall picture remains resilient, giving the FOMC space to focus on inflation. The August CPI and PPI reports next week will be the final inflation readings before the September meeting.

Oil prices held near multi-week highs on Thursday as the renewed U.S.–Iran military confrontation continued to stoke supply concerns. Brent crude futures edged up 0.2% to $95.81 a barrel, while WTI rose 0.7% to $91.68. Both contracts were sitting on hefty weekly gains, with Brent up 8.4% and WTI up 10%, as fears of Strait of Hormuz disruption persisted. Iran’s state media reported drone and missile strikes against U.S. bases in Kuwait, while Trump said the new military exchanges would not last “too long” and touted a chart showing current oil volumes through the Strait at 18 million barrels per day, down from 20 million before the conflict.

U.S. commercial crude stocks fell by 4.5 million barrels last week — the first decline in five weeks — defying analysts’ estimates for a small rise. U.S. Energy Secretary Chris Wright said 17 million barrels of crude passed through the Strait on Monday, the highest volume since the conflict sharply reduced flows, although shipping traffic remains volatile with only four commodity vessels transiting on Tuesday versus a 10-day average of about 13. OPEC+ meets on Sunday and is expected to leave October output policy unchanged.

Spot gold vs the U.S. dollar index — gold surged as the dollar weakened to its lowest since May.

Gold jumped 2.3% to $4,488.54 per ounce, touching its highest since August 28, as the weaker dollar and lower Treasury yields reduced the opportunity cost of holding the non-yielding metal. Silver gained 2.8% to $67.13, platinum rose 4.2% to $1,830.28, and palladium climbed 5.9% to $1,426.75. In currencies, the Bloomberg Dollar Spot Index fell 0.5%, with the euro rising 0.4% to $1.1630 and sterling up 0.3% to $1.3529. Bitcoin surged 5.4% to $81,578.26, back above $80,000 for the first time in weeks.

Commodities, energy & FX performance — crude oil up 9.94% for the week; gold +1.90% daily; Bitcoin +5.14% daily. AUD +0.47% as the Aussie hit a four-month high.

The Japanese yen soared 2% on Thursday to 155.52 per dollar — its best day since Tokyo and Washington entered the market to prop up the currency just over a month ago. The move came without any apparent official intervention, making it all the more remarkable. Traders are betting heavily on a BOJ rate hike at the September 18 meeting, with the swaps market nearly fully pricing a 25 basis point increase and factoring in about 80% probability of an additional hike in December.

USD/JPY — the yen rallied sharply to 155.52 on 3 September as traders lifted BOJ rate hike bets and remained on intervention watch. Source: Bloomberg

BOJ board member Hajime Takata reinforced speculation on Wednesday that the central bank could take a more aggressive approach than expected, saying a 25 basis point hike “is not necessarily set in stone” and that back-to-back rate hikes would be a possibility. Japan’s top currency official Atsushi Mimura told reporters he was unsatisfied with the yen’s current level and pledged to “continue the battle on FX.”

U.S. Treasury Secretary Scott Bessent has stepped up increasingly public pressure on Japan to raise interest rates, meaning any failure by the BOJ to follow through would not only surprise traders but also risk sending the yen tumbling again. Nomura’s FX strategist Yusuke Miyairi said that in this environment, dollar-yen is likely to stay closer to the bottom of a 155–160 range.

Dollar/yen daily — the pair tumbled from 164 to 155.77, erasing weeks of gradual decline in a single session.

Australian shares are poised to open higher, tracking the broad advance on Wall Street. ASX 200 futures were up 25 points or 0.3% to 9,037. The Australian dollar scaled a fresh four-month high of US72.08¢ overnight after Waller’s comments dragged the greenback lower, bringing the Aussie’s year-to-date gains to 7.8%. It was trading just below US72¢ at 7.30am AEDT.

Australia’s 10-year government bond yield eased to 5.157% on Thursday, taking a breather after climbing to a more-than-15-year high of 5.205% on Wednesday following resilient domestic GDP figures and hot July inflation metrics. The pullback in global yields should provide some relief for rate-sensitive sectors on the ASX.