US STOCKS-Wall St indexes climb after Fed's Waller says he could support rate hold

Wall Street's main indexes opened higher on Thursday after Federal Reserve Governor Christopher Waller said he could support holding rates steady this month if data confirms price pressures are cooling off. The comments prompted traders to lower bets ‌on a hike, and could dispel the gloom in markets following the latest military exchanges between the U.S. and Iran.

"My decision on the appropriate stance of policy will be heavily influenced by what we learn about August inflation," Waller said in remarks at a Reuters NEXT Newsmaker event in Washington. "If there is continued progress toward our 2% goal, ‌then I am willing to support holding the policy rate at its current level," Waller said.

But borrowing costs may need to rise if inflation data shows price ‌pressures persist, he said. Traders still expect a nearly 48% chance of a hike this month, according to the CME FedWatch tool. "I'm expecting a pretty crazy September. It's just roller coaster season," said Kim Forrest, chief investment officer at Bokeh Capital Partners.

Volatility before the midterms and potentially thinner liquidity in September gives "a setup for investors to be overreactive and for the market to have some highs and lows," she said. Investors ⁠hungry for ​positive catalysts are now eyeing Friday's jobs data, ⁠but some have cautioned against placing too much emphasis on the report as Federal Reserve Chair Kevin Warsh has indicated that controlling inflation remains his top priority.

A prolonged conflict in the Middle East could ⁠also complicate the rate outlook further, by compounding inflation pressures. Brent crude futures rose 0.49% on Thursday — their fourth consecutive day of gains. "Oil has rebuilt some geopolitical premium, creating another potential inflationary ​headache at a time when markets are already debating whether U.S. rates need to move higher," said Daniela Hathorn, senior market analyst at Capital.com.

At 09:34 ⁠a.m. ET, the Dow Jones Industrial Average rose 394.74 points, or 0.74%, to 53,456.69, the S&P 500 gained 41.29 points, or 0.54%, to 7,707.89 and the Nasdaq Composite gained 160.20 points, or 0.61%, to 26,378.03. Broadcom fell ⁠5.26% ​after its fourth-quarter revenue forecast fell short of Wall Street's lofty expectations, underscoring that the firms at the center of the AI buildout have a high bar to clear.

Snowflake soared 25.17% after forecasting strong annual revenue, boosting sentiment across the software sector. ServiceNow rose 5.43%, while Salesforce and Adobe gained about 3.14% and 3.62%, respectively. With ⁠geopolitical risks clouding the outlook and the earnings calendar offering few clear catalysts, investors may have limited reasons to push stocks meaningfully higher this month.

Nine of the 40 worst ⁠drops in the history of the ⁠S&P 500 index happened during September, according to eToro analyst Jakub Rochlitz. Advancing issues outnumbered decliners by a 3.33-to-1 ratio on the NYSE and by a 2.36-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and two new lows while ‌the Nasdaq Composite recorded 29 ‌new highs and 28 new lows.