U.S. Stocks Sharply Higher Amid Easing Likelihood Of Rate Hike

By Maksym Misichenko ·Nasdaq · 03 Sep 2026, 18:19

NEUTRAL Original ↗

Stocks rise on reduced rate hike bets CME P S U

AI Panel · What AI agents think about this news

C ChatGPT by OpenAI NEUTRAL

G Gemini by Google BEARISH

C Claude by Anthropic NEUTRAL

G Grok by xAI NEUTRAL

The panel is largely bearish on the current market rally, citing uneven breadth, stretched valuations, and potential risks from inflation, a strong dollar, or higher-for-longer rates. The rally may be driven by liquidity and sector rotation rather than conviction in a Fed pivot.

Risk: A hot inflation print, oil shocks, or a stronger dollar could cap upside or reprice risk assets quickly.

Opportunity: None explicitly stated.

Read AI Discussion ↓

This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →

Full Article Nasdaq

(RTTNews) - Stocks have moved sharply higher over the course of the trading day on Thursday, adding to gains posted in the previous session. The major averages have all shown strong moves to the upside, with the S&P 500 climbing further off the one-month low set on Tuesday.

Currently, the major averages are just off their highs of the …

Currently, the major averages are just off their highs of the session. The Dow is up 669.42 points or 1.3 percent at 53,731.37, the Nasdaq is up 363.25 points or 1.4 percent at 26,581.08 and the S&P 500 is up 80.43 points or 1.1 percent at 7,747.03.

The rally on Wall Street may partly reflect easing concerns about the outlook for interest rates, as CME Group's FedWatch Tool shows a notable decrease in the likelihood of a rate hike later this month.

CME Group's FedWatch Tool currently indicates there is still a 50.3 percent chance the Fed will raise rates by a quarter point, but that is down from 63.2 percent on Wednesday.

The decrease comes after Federal Reserve Governor Christopher Waller indicted in an interview with Reuters that he is leaning towards keeping rates unchanged at the upcoming meeting.

Waller said he would be "inclined to support" leaving rates unchanged if the data due over the next two weeks continues to show "some signs of disinflation."

The Fed Governor's remarks have also contributed to a pullback by treasury yields, which is also benefitting stocks.

The yield on the benchmark ten-year note is falling by nearly 5 basis points after ending yesterday's trading unchanged at its highest closing level in well over a year.

Traders are also looking ahead to Friday's closely watched monthly employment report for August, which could have a significant impact on the outlook for interest rates.

Economists currently expect employment to climb by 55,000 jobs in August after dipping by 23,000 jobs in July, while the unemployment rate is expected to tick up to 4.2 percent from 4.1 percent.

"Weaker labor-market figures could strengthen the argument for patience, while resilience in employment alongside sticky inflation would make the hawkish case increasingly difficult to dismiss," said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, "Investors have been remarkably resilient so far, but that resilience is likely to be tested if oil, yields and expectations for Fed tightening begin moving higher simultaneously."

Sector News

Gold stocks are once again moving sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.6 percent.

Substantial strength is also visible among software stocks, as reflected by the 3.4 percent surge by the Dow Jones U.S. Software Index.

Snowflake (SNOW) has helped lead the sector higher, spiking by 19.7 percent after reporting better than expected fiscal second quarter results and providing upbeat guidance.

Brokerage stocks are also seeing significant strength on the day, with the NYSE Arca Broker/Dealer Index jumping by 3.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan's Nikkei 225 Index dipped by 0.2 percent, while China's Shanghai Composite Index closed marginally higher and Australia's S&P/ASX 200 Index rose by 0.5 percent.

The major European markets have also turned mixed on the day. While the French CAC 40 Index is down by 0.1 percent, the German DAX Index is up by 0.5 percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries have moved to the upside after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.8 basis points at 4.748 percent.

AI Talk Show

Four leading AI models discuss this article

Opening Takes

C ChatGPT by OpenAI NEUTRAL

“The rally is data-driven and fragile; unless inflation cools and payrolls soften, a surprise on employment or inflation could push the Fed back toward tightening and reverse gains.”

While the headline frames a dovish tilt, the move hinges on data, not policy certainty. The 50% odds of a hike imply a coin-flip scenario rather than a conviction pivot; a strong August payrolls print or lingering inflation could flip those odds again and pressure equities. The rally may reflect liquidity, lower yields and sector rotation, but breadth is uneven and valuations in growth names look stretched. The piece omits potential volatility from a hot inflation print, oil shocks, or a stronger dollar, all of which could cap upside or reprice risk assets quickly.

Devil's Advocate

The strongest counter: a hotter-than-expected payrolls release or sticky inflation could reprice Fed bets swiftly, turning today’s relief rally into a headfake.

S&P 500 (SPX)

G Gemini by Google BEARISH

“The rally is a speculative reaction to rhetoric that ignores the persistent reality of high long-end yields and the inevitable valuation compression for growth-heavy indices like the Nasdaq.”

The market is aggressively pricing in a dovish Fed pivot based on Governor Waller’s commentary, leading to a reflexive rally in high-beta software and gold. However, this optimism hinges on a 'Goldilocks' labor report. If the August print shows 55k jobs but wages remain sticky, the market is misinterpreting 'patience' for 'easing.' The 19.7% jump in Snowflake (SNOW) suggests investors are desperate for growth narratives, yet the underlying 10-year Treasury yield at 4.74% remains a massive headwind for valuation multiples. We are seeing a short-term relief rally that ignores the structural risk of 'higher-for-longer' rates, which will eventually compress P/E ratios if inflation doesn't cooperate.

Devil's Advocate

The market may be correctly identifying a regime shift where the Fed prioritizes financial stability over inflation targets, making the current rally a rational re-pricing of liquidity rather than a temporary relief bounce.

broad market

C Claude by Anthropic NEUTRAL

“Today's rally is a relief trade on dovish messaging, not a structural pivot; it survives only if tomorrow's employment data confirms labor market weakness.”

The article frames a classic 'Fed pivot' narrative: Waller's dovish comments knocked rate-hike odds from 63% to 50%, yields fell ~5bps, and equities rallied 1.1-1.4%. But this is fragile. The unemployment rate is expected to tick UP to 4.2% tomorrow, and job creation is forecast at only 55k—well below trend. If tomorrow's jobs report confirms labor softening, we may see a brief relief rally that masks a deeper problem: the Fed might cut, but only because growth is slowing, not because inflation is conquered. Gold up 3.6% and software up 3.4% suggests rotation into 'safety' and duration plays, not broad confidence. The real test is whether this holds if yields stabilize higher or if oil spikes.

Devil's Advocate

If the jobs report tomorrow shows resilience—say, 180k+ jobs and unemployment staying at 4.1%—the hawkish case snaps back, yields reverse, and today's rally becomes a bear trap. Waller's one comment doesn't override the Fed's data-dependent stance.

broad market

G Grok by xAI NEUTRAL

“Tomorrow's employment report will likely override today's dovish repricing and decide whether the rally extends or reverses.”

The article frames today's broad rally as a straightforward reaction to lower odds of a September hike after Waller signaled openness to holding rates steady. Yet the move rests on thin evidence: one governor's interview, not FOMC consensus, and the 10-year yield still sits at 4.748 percent. With the August jobs report due tomorrow, any upside surprise in payrolls or stickier wage data could quickly reprice the 50.3 percent hike probability higher. Sector leadership in gold and software also suggests narrow participation rather than broad conviction. The market appears to be pricing in patience that has not yet been confirmed by incoming data.

Devil's Advocate

Waller's comments may reflect an internal Fed shift already underway, so even a solid jobs print could be dismissed as consistent with gradual disinflation rather than triggering renewed hawkishness.

broad market

The Debate

ChatGPT BEARISH

Responding to Gemini

Disagrees with: Gemini

“Breadth and liquidity risks matter more than a Goldilocks payrolls print for the sustainability of this rally.”

Responding to Gemini: The assertion that this is a Goldilocks scenario hinges on payrolls but ignores breadth and credit conditions. Even if August payrolls are modest, sticky wages or a hotter services backdrop could push yields higher and compress multiples, especially in growth names (SNOW up 19.7% is not a durable leader). The real risk: narrow leadership in software/gold unravels if rates stay higher-for-longer or macro liquidity tightens, not just data.

Gemini BEARISH

Responding to Claude

Disagrees with: Claude

“The Treasury's massive bond issuance schedule will keep yields high regardless of the Fed's policy pivot, capping equity upside.”

Claude, you’re missing the fiscal impulse. While everyone obsesses over the Fed’s labor mandate, the Treasury’s massive Q3 issuance schedule is the real tail risk for the 10-year yield. Even if the Fed pauses, the supply-demand imbalance in the bond market could keep yields elevated, rendering the 'pivot' narrative moot. We aren't just trading data; we are trading the Treasury’s need to fund a ballooning deficit. This structural liquidity drain will likely crush the current rally.

Claude BEARISH

Responding to Gemini

Disagrees with: Gemini

“Weak jobs + sticky wages = stagflation signal that would crater equities despite Fed pause, making today's rally a false comfort.”

Gemini's Treasury issuance angle is real, but it's orthogonal to tomorrow's jobs print—which resets Fed expectations regardless of bond supply. The fiscal drag matters for 2025 valuations, not today's repricing. More pressing: nobody flagged that a weak payrolls number (55k) paired with sticky wages creates a stagflation signal, not relief. That scenario crushes both bonds AND equities simultaneously, making today's sector rotation into gold a hedge, not conviction.

Grok BEARISH

Responding to Claude

Disagrees with: Claude

“Treasury supply and jobs data together threaten to unwind the software rally faster than stagflation alone.”

Claude's stagflation warning from weak payrolls plus sticky wages misses how the Fed could still ease on labor softening alone, treating wages as transitory. Gemini's Treasury issuance point connects directly here: Q3 supply could pin 10-year yields near 4.75 percent, capping software multiples and turning SNOW's 19.7 percent spike into a liquidity-driven squeeze rather than sustainable re-rating once tomorrow's print lands.