Wall Street Surges Over 1% and Gold Climbs 2% as Waller Tempers September Rate Hike Bets

The Quick Take

• US equities rallied more than 1% on Thursday as Fed Governor Waller's comments on pausing rate hikes lifted risk appetite across all major US indices.
• Gold rose 2% as weaker rate-hike expectations lowered Treasury yields and softened the dollar, boosting the safe-haven commodity simultaneously.
• S&P 500, Nasdaq, and Dow Jones all gained with Nvidia and software stocks leading, while Broadcom fell after revenue guidance failed to meet high AI expectations.
• Lower Treasury yields and a weaker dollar created simultaneous tailwinds for both equities and gold — an unusual risk-on and safe-haven rally combination.

US equity markets posted broad-based gains exceeding 1% on Thursday as Fed Governor Christopher Waller signalled openness to keeping interest rates unchanged if inflation continues on its current cooling trajectory. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all advanced, reflecting the market's sensitivity to any signals that the Federal Reserve's tightening cycle is nearing its end. The simultaneous rally in gold — a non-yielding safe-haven asset — underscores the degree to which lower Treasury yields and a softer dollar created an unusually favorable macro environment for multiple asset classes at the same time.

The divergence within the tech sector is notable: Nvidia and software names benefited from the rate-sensitive long-duration valuation re-rating that lower yields enable, while Broadcom sold off after its revenue guidance failed to clear the high bar set by AI infrastructure enthusiasm. This pattern highlights the bifurcation of the semiconductor sector into Nvidia — the AI-compute winner — and the rest of the chip ecosystem facing more cyclical headwinds. For Indian investors, the dual rally in equities and gold presents a portfolio alignment opportunity, as India's gold demand and IT sector exports both benefit from a softer US dollar environment.

All attention now focuses on the August non-farm payrolls report scheduled for September 4, which will validate or invalidate the thesis driving Thursday's rally. Market consensus expects around 165,000 new jobs with unemployment steady at 4.1%. A reading below expectations would confirm labor market cooling and cement the pause thesis, potentially extending the equity and gold rally further. The macro variable is core PCE inflation — Waller explicitly conditioned his pause preference on continued inflation cooling, making the September CPI release a potential circuit-breaker for the current rally if it comes in hotter than expected.

Synthesized from 2 sources.