Dramatic Signal from Wall Street: Investors Storm the Market

A signal from a senior Federal Reserve official shifted market sentiment and gave investors on Wall Street a reason to storm the market. The trading day in New York ended with sharp gains: the Nasdaq index climbed by 1.4%, the S&P 500 strengthened by 1%, and the Dow Jones added 1.2%. Tech stocks, particularly software companies, led the positive trend, with the financial sector also standing out.

The primary driver behind the gains was a decline in expectations for an interest rate hike in the US during September.

The reaction was also evident in the bond market. The yield on the ten-year US Treasury note fell to approximately 4.765%, after approaching an annual high of 4.8% in recent days. The yield on the two-year note, which is particularly sensitive to short-term interest rate expectations, also retreated.

Robinhood shares surged by 15% against the backdrop of a recovery in the digital currency market. Bitcoin rose by about 4%, returning to trade above $80,000. This rise led to jumps of over 10% in several crypto-related stocks, including Strategy and Coinbase.

Tesla finished the session with a 7% jump ahead of the unveiling of the production version of the Cybercab in Austin.

Snowflake also attracted attention after publishing strong reports and an improved forecast. The company's revenue totaled $1.55 billion, a 35% increase compared to the same period, and adjusted profit reached 62 cents per share, far exceeding the 45-cent forecast. The company raised its annual product revenue forecast to $6.07 billion. Its stock jump provided a tailwind for other software companies, including ServiceNow and Palantir.

Conversely, Broadcom shares fell after its fourth-quarter revenue forecast missed investor expectations, despite the company reporting financial results that beat forecasts. Ultragenyx Pharmaceutical also lost ground following the failure of a phase 3 trial for a drug treating Angelman syndrome.

At the same time, Nvidia announced an agreement to acquire the Hugging Face platform for $12.93 billion.

Labor market data also drew interest ahead of the monthly employment report. The number of new applications for unemployment benefits rose by 2,000 to 206,000, slightly above forecasts. The number of continuing unemployment benefit recipients increased to 1.78 million. Estimates suggest the US economy added about 53,000 jobs in August, following a surprising decline of 23,000 jobs in July.

Outside the stock market, the price of a barrel of Brent crude approached $97 due to continued tension in the Middle East. The Japanese yen strengthened by about 2% against the dollar, amid assessments that the Bank of Japan might raise interest rates and the possibility of further intervention by the country's authorities.