Wall Street Rises on Rate Hopes, Snowflake and Crypto Stocks Lead Gains

In the hope that the US Federal Reserve will continue to pause on interest rates, investors on Wall Street are buying heavily into stocks. Software stocks were particularly in demand following an encouraging outlook from Snowflake. Bitcoin is pulling more crypto stocks higher.

Prospects of a possible interest rate break by the US Federal Reserve drove Wall Street on Thursday. The Dow Jones index of standard stocks closed 1.2 percent higher at 53,686 points. The broader S&P 500 advanced 1.1 percent to 7,748 points. The Nasdaq technology exchange index gained 1.4 percent to 26,584 points.

Fed Governor Christopher Waller told Reuters that he would be inclined to leave key interest rates unchanged if upcoming data confirm an easing of price pressures. However, he would support a rate hike if inflation does not cool down. Investors then scaled back their expectations for a rate hike at the Fed meeting in September. According to the CME stock exchange's FedWatch tool, the probability of this fell to 50.4 percent from 63.2 percent on Wednesday.

US Treasury yields also fell for the second day in a row, having previously reached their highest level since November 2023.

Crypto stocks are posting gains

When it came to individual stocks, the focus was on technology and AI stocks. Nvidia's shares rose by 1.8 percent. The chip company announced that it would take over the developer platform Hugging Face for $12.9 billion in order to challenge rivals such as OpenAI and Anthropic. In contrast, Broadcom shares fell 2.7 percent. The chip developer missed investors' high expectations with its sales forecast for the fourth quarter.

A strong outlook, however, gave Snowflake a price jump of 16.6 percent. This also pulled up other software stocks such as ServiceNow, Salesforce and Adobe, which gained between 2.1 and 6.5 percent. Crypto stocks also posted significant gains after Bitcoin recovered from recent losses. Strategy's shares jumped 17.6 percent, Coinbase gained 10.1 percent. Shares on the Robinhood trading platform rose by 16.6 percent.

The economic data published on Thursday was mostly positive. There were few initial applications for unemployment assistance and an upturn in the service sector. However, the purchase prices of service providers reached their highest level since October 2022. Investors are now looking forward to the government's labor market report for August, which will be published on Friday. Experts expect the US economy to have added 56,000 new jobs last month and the unemployment rate to remain stable at 4.1 percent.