The Nasdaq Composite jumped 1.4% on Thursday, September 3, 2026, as investors curbed their rate hike bets after Federal Reserve Governor Christopher Waller signaled the central bank could hold interest rates steady if inflation continues to cool. The index gained 366.23 points to close at 26,584.06, joining the S&P 500 and Dow Jones in posting solid daily gains.
Waller told Reuters he would be inclined to let key interest rates stand should upcoming economic data confirm that price pressures are easing, though he added he would support a rate hike if inflation fails to moderate. His remarks immediately shifted market sentiment toward less aggressive Fed action.
Following Waller’s comments, financial markets moderated expectations for a rate hike at the Fed’s September meeting, lowering the likelihood to 50.4% from 63.2% on Wednesday, according to CME’s FedWatch tool. The benchmark U.S. Treasury yield pulled back for the second straight session after touching its highest level since November 2023, as investors reassessed the outlook for borrowing costs.
The rally was broad-based across technology stocks. The “Magnificent Seven” group of AI-related megacap stocks received a particular boost from the easing rate outlook, as lower interest rates reduce the discount applied to future corporate earnings. Nvidia rose 1.8% after announcing a $12.9 billion acquisition of developer platform Hugging Face. Software stocks led sector gains, with Snowflake surging 16.6% on strong annual revenue guidance, lifting ServiceNow, Salesforce, and Adobe between 2.1% and 6.5%.
The Treasury yield decline reflects a broader shift in market expectations after weeks of pressure on bonds. Higher Treasury yields had been a major headwind for stocks, particularly growth-oriented technology companies that rely on low borrowing costs to finance operations and capital projects. According to U.S. Bank Wealth Management, Waller’s commentary provided “a broad lift for markets writ large,” though underlying stock performance remained differentiated by earnings results and sector-specific developments.
Advancing issues outnumbered decliners by a 1.98-to-1 ratio on the New York Stock Exchange, with 2,957 stocks rising and 1,771 falling on the Nasdaq. All three major U.S. stock indexes closed at least 1% higher and were on track for weekly gains. Crypto-linked stocks also rebounded strongly, with Marathon Digital jumping 17.6% and Coinbase Global surging 10.1% as bitcoin recovered from two straight sessions of losses.
The economic backdrop remained mixed. Thursday’s reports showed low jobless claims and an acceleration in the service sector, but services input prices hit their highest level since October 2022, and the international trade gap widened by 24.4%. The Labor Department is scheduled to release August employment data on Friday, with economists expecting the U.S. economy to have added 56,000 jobs last month while the unemployment rate holds steady at 4.1%.
Sources
- Reuters — Nasdaq Composite gain of 1.4% on September 3, 2026; Fed Governor Waller’s dovish remarks on rate holds; Treasury yield pullback; CME FedWatch rate-hike probability shift; stock sector performance and individual stock moves
- CME FedWatch Tool — Rate-hike expectations moderated from 63.2% to 50.4%
- U.S. Bank Wealth Management — Commentary on Waller’s market impact
