Wall Street Opens Higher as Tech Stocks Rally, Yields Cool from Multi-Year Peaks

Mumbai, Sept 3: US stock markets commenced Thursday’s trading session firmly in positive territory, as a moderation in Treasury yields from multi-year highs and stabilising oil prices provided relief to investors. The tech-heavy Nasdaq Composite rose 0.86% to 26,442.97, while the Dow Jones Industrial Average gained 0.81% to 53,492.47 in early trading. The broad-based S&P 500 climbed 0.57% to 7,710.35, as markets shook off recent weakness spurred by geopolitical tensions and inflation concerns. 

Dow, S&P 500, Nasdaq Open Higher as Yields Retreat from 4.81% Peak 

The rally on Wall Street follows two consecutive sessions of losses, with Wednesday’s rebound snapping a three-day losing streak for all three major indices. The Dow added 295.07 points, or 0.56%, to close at 53,061.95 on Wednesday, while the S&P 500 gained 0.46% and the Nasdaq Composite rose 0.45%. 

The catalyst for Thursday’s upbeat open appears to be a pullback in bond yields. The benchmark 10-year Treasury yield declined to 4.75% after touching 4.818% on Wednesday – its highest level since November 2023. The retreat followed a global bond sell-off that had raised concerns about persistent inflation and rising US government debt. The 2-year Treasury yield was at 4.35%, while the 30-year yield eased from recent highs. 

Tech Stocks Lead Gains as NVIDIA Rises 1.85%, Tesla Surges 5.65% 

Technology stocks powered the early rally, with semiconductor and AI-related names showing strong momentum. Nvidia (NVDA) rose 1.85% after the AI leader announced it would acquire open AI platform Hugging Face for roughly $13 billion, a deal expected to close in 2027. Microsoft (MSFT) advanced 2.98%, while Meta Platforms (META) surged 4.20% and Tesla (TSLA) jumped 5.65%. 

Other notable gainers included Palantir Technologies (PLTR), which soared 6.89% on the Nasdaq and 7.37% on the S&P 500. Intuit (INTU) rose 4.10%, and Adobe (ADBE) added 3.17%. The technology sector broadly outperformed, with the communication services and consumer cyclical sectors also recording solid gains. 

Early Gainers and Losers: Palantir Jumps 7%, Broadcom Plunges 6% 

Among the top early gainers on the S&P 500, Palantir Technologies (PLTR) led the charge with a 7.37% surge, followed by Tesla (TSLA) at 5.25% and ServiceNow (NOW) with a 5.43% advance. Intuit (INTU) climbed 4.10%, while Meta Platforms (META) rose 4.06%. In the Nasdaq 100, Bullfrog AI (BULL) surged 6.89%, while Zeta Global (ZETA) gained 5.39% on the Russell 2000. 

On the losing side, Broadcom (AVGO) tumbled 6.28% on the S&P 500 and 6% on the Nasdaq 100 following its disappointing revenue guidance. Western Digital (WDC) dropped 3.86%, while MXL fell 4.02% and AAOI declined 3.97% on the Nasdaq. In the Russell 2000, DFTX plunged 2.80%, and HCC slumped 4.69%. VSXY was the worst performer on the Russell 2000, collapsing 13.84%. 

Broadcom Slumps 6% as Q4 Revenue Guidance Disappoints Wall Street 

In contrast, Broadcom (AVGO) emerged as one of the session’s biggest losers, tumbling 6% on the Nasdaq and 6.28% on the S&P 500. The chipmaker reported better-than-expected fiscal third-quarter results but issued fourth-quarter revenue guidance that fell short of Wall Street’s elevated expectations. 

The company’s results were “not enough to keep investors happy,” according to Cody Acree, StoneX financial equity research analyst. “The magnitude is not quite enough from a top- and bottom-line standpoint on the beat and raise when you have a company that is this levered to AI,” Acree noted. The decline in Broadcom shares highlighted the demanding outlook facing companies at the centre of the artificial intelligence investment boom. 

Also Read: How to Invest in the US Stocks From India

Snowflake Surges 23% After Strong Q2 Results, Lifts Cloud Sector Sentiment 

Snowflake (SNOW) emerged as a standout performer, surging 23% after the cloud data platform posted upbeat second-quarter financial results. The company reported adjusted earnings of 62 cents per share on revenue of $1.55 billion, exceeding analyst expectations. Snowflake also issued a strong annual revenue forecast, boosting investor confidence in the cloud computing sector. 

The company maintains a strong price trend in the long, short, and medium terms, according to Benzinga’s Edge Stock Rankings. The positive reaction to Snowflake’s results provided a tailwind for other cloud-related names, with CrowdStrike (CRWD) rising 1.98% and Shopify (SHOP) advancing 1.23%. 

HPE Falls 5% Despite Record Q3 Revenue as Supply Constraints Cap AI Server Gains 

Hewlett Packard Enterprise (HPE) shares tumbled 5% to $27.92 in Thursday trading, despite the company posting record quarterly revenue and raising its fiscal 2026 forecast, as persistent supply chain bottlenecks prevented the server maker from capitalising fully on surging AI demand. 

The company reported fiscal third-quarter revenue of $12.2 billion, up 34% year-over-year, surpassing analyst estimates of $11.9 billion. Adjusted earnings reached $1.11 per share, comfortably above the company’s previous outlook. Server revenue climbed 35% to $6.8 billion, while networking revenue jumped 75% to $2.9 billion, driven by a 270% surge in routing revenue. HPE also raised its fiscal 2026 revenue-growth forecast to 34% to 37%, up from a prior range of 29% to 33%. 

However, Chief Executive Officer Antonio Neri flagged DRAM and NAND inflation as binding constraints on converting orders into revenue. Chief Financial Officer Marie Myers told Reuters that memory tops the list of constrained components, with NAND, CPUs, and drives also creating shortfalls. ”Demand is far outstripping supply,” Myers said. The company’s AI systems backlog stood at $5.9 billion entering the quarter, yet supply limitations prevented HPE from converting more of its demand into near-term revenue. 

The after-hours decline leaves the stock consolidating after a roughly 120% year-to-date advance that had already priced in the beat. Elsewhere, Netskope (NTSK) surged over 10% in premarket trading after reporting 29% revenue growth to $221 million and narrowing its adjusted loss to $0.03 per share. Lululemon (LULU) traded modestly higher ahead of its after-market earnings report, with analysts expecting $1.82 per share on revenue of $2.46 billion. The stock has declined 42.6% year-to-date. 

Initial Jobless Claims Edge Up to 206,000, Trade Deficit Widens to $88.6 Billion 

Economic data released Thursday morning painted a mixed picture of the US economy. Initial jobless claims for the week ending August 29 ticked up slightly by 2,000 to a seasonally adjusted 206,000, reflecting continued tightness and stability in the labour market. The reading came in above estimates of 204,000. 

Meanwhile, the US goods and services trade deficit widened sharply by $17.4 billion, or 24.4%, to $88.6 billion in July as imports surged while exports declined. Imports rose 2.8% to $399.3 billion, while exports slipped 2.1% to $310.7 billion. 

Layoff announcements slowed in August, with US companies announcing just under 53,000 job cuts, making it the quietest August for layoffs since 2022. Consumer products companies and food producers accounted for a significant portion of the reductions. 

Oil Prices Stabilise Above $95 as US-Iran Tensions Persist 

Oil futures traded in positive territory, with Brent crude rising 0.65% to $96.25 per barrel and West Texas Intermediate (WTI) crude advancing 1% to $92 per barrel. Brent futures for November delivery extended their winning streak to a fourth session, trading at $97.62 a barrel. 

The gains came as the United States launched more military strikes on Iran, raising concern that the conflict could escalate further. President Donald Trump said the US carried out a “very heavy attack” against Iran but also stated that the attack would not take “too long”. Iran reportedly fired at Kuwait on Thursday as part of its retaliation for US bombardments earlier in the week. 

Energy Secretary Chris Wright told CNBC that more than 17 million barrels of oil moved through the Strait of Hormuz on Monday – the highest level since the Iran war broke out in February. Despite the geopolitical tensions, analysts expect oil prices to trend down over the next six months as non-OPEC production ramps up. 

Fed’s Waller Signals Patience on Rate Policy, 60% Chance of September Hike 

Federal Reserve Governor Christopher Waller provided a key catalyst for Thursday’s market rally, stating that he would be “inclined to support” keeping interest rates unchanged this month as long as upcoming inflation data does not incentivise otherwise. His comments signalled that policymakers remain data-dependent and open to pausing rate increases. 

However, markets are still pricing in a 60.2% likelihood of the Federal Reserve hiking interest rates at its September meeting, according to the CME Group’s FedWatch tool. The probability reflects ongoing concerns about inflationary pressures, particularly from rising energy prices and strong economic activity. 

Edward Jones strategist Angelo Kourkafas noted that Friday’s employment report and next week’s inflation data will play a significant role in determining whether policymakers decide to raise rates in September. He emphasised that underlying fundamentals remain constructive despite near-term volatility. 

Dollar Index Drops 0.31% as Yen Strengthens 1% Against Greenback 

The US Dollar Index (DXY) fell 0.31% to the 99.2900 level, as the Japanese yen strengthened significantly against the dollar. The yen rose over 1% against the dollar, trading at 156.1 yen per dollar. The strengthening yen came as Japan’s 10-year government bond yields traded around multi-decade highs, giving Japanese savers and institutions less reason to send money overseas into Treasuries. 

Gold rose 1.17% to hover around $4,439.36 per ounce, reflecting safe-haven demand amid geopolitical uncertainty. Bitcoin traded 1.10% higher at $77,923. 

Also Read: How to Invest in S&P 500 Stocks Through Index Funds

S&P 100 Gains 0.6% as Mega-Cap Tech Stocks Outperform 

The S&P 100 index, which tracks the largest companies in the S&P 500, rose approximately 0.6% in early trading, outperforming the broader market. Mega-cap technology stocks led the advance, with Microsoft (MSFT) up 2.98%, Meta (META) gaining 4.20%, and Nvidia (NVDA) rising 1.85%. Alphabet (GOOGL) added 1.99%, while Amazon (AMZN) rose 1.48%. 

Financial stocks also contributed to the index’s gains, with Goldman Sachs (GS) jumping 3.10% and JPMorgan Chase (JPM) rising 1.09%. The S&P 100’s performance reflected broad-based strength across multiple sectors, with only healthcare and consumer defensive stocks showing modest weakness. 

Dow Jones Composite, Transport, Utility Averages Show Mixed Performance 

The Dow Jones Composite Average, which includes all stocks listed on the Dow Jones exchanges, rose in line with the broader market. The Dow Jones Transportation Average gained 0.4%, buoyed by airline and logistics stocks as oil prices stabilised. Delta Air Lines (DAL) and United Airlines (UAL) both traded higher, while railroad operators Union Pacific (UNP) and CSX (CSX) showed modest gains. 

The Dow Jones Utility Average declined 0.2%, bucking the broader market trend as rising bond yields continued to pressure dividend-paying utility stocks. NextEra Energy (NEE) and Duke Energy (DUK) both traded lower, reflecting the sector’s sensitivity to interest rate movements. The mixed performance across the three averages highlighted the divergent impact of current market conditions on different sectors of the economy. 

Philadelphia Semiconductor Index Falls 1.5% as Chip Stocks Retreat 

The Philadelphia Semiconductor Index (SOX) declined approximately 1.5% in early trading, underperforming the broader market. The weakness was driven by sharp declines in several major chipmakers, with Broadcom (AVGO) falling 6.28% and AMD (AMD) dropping 2.05%. Micron Technology (MU) declined 1.25%, while Texas Instruments (TXN) fell 2.10%. 

Applied Materials (AMAT) lost 1.65%, and Lam Research (LRCX) declined 2.20%. The semiconductor sector’s weakness came despite strong performance from AI-related names like Nvidia, highlighting the divergence within the industry. The SOX’s decline reflected concerns about valuations and the demanding growth expectations facing chip companies. 

NYSE Composite Rises 0.5% as Breadth Improves 

The NYSE Composite Index gained approximately 0.5% in early trading, with advancing stocks outnumbering decliners by a margin of nearly 2-to-1. The index’s performance reflected improving market breadth, with strength spread across multiple sectors including financials, industrials, and consumer discretionary. 

Goldman Sachs (GS) surged 3.15% on the NYSE, while JPMorgan Chase (JPM) added 1.17%. Bank of America (BAC) rose 0.43%, and Morgan Stanley (MS) gained 2.62%. The financial sector’s strength was supported by rising net interest margins as bond yields remained elevated. Citigroup (C) advanced 2.22%, and Wells Fargo (WFC) rose 0.97%. 

S&P MidCap 400 and SmallCap 600 Edge Higher as Russell 2000 Gains 0.49% 

The S&P MidCap 400 and S&P SmallCap 600 indices both edged higher in early trading, reflecting broad-based participation in the market rally. The Russell 2000 index of small-cap stocks rose 0.49% to 2,967.66, recovering from recent weakness. The index’s day’s range was 2,968.21 to 2,976.62, with the previous close at 2,953.17. 

Small-cap outperformance was driven by strength in industrial and technology names. Joby Aviation (JOBY) surged 3.89%, while Archer Aviation (ACHR) jumped 3.98%. Zeta Global (ZETA) soared 5.39%, and Bullfrog AI (BULL) gained 6.89%. The Russell 2000’s 52-week range stands at 2,303.46 to 3,069.71. 

CBOE Volatility Index Drops 5% as Market Fear Subsides 

The CBOE Volatility Index (VIX) declined approximately 5% in early trading, reflecting reduced investor anxiety as markets opened higher. The VIX, often referred to as Wall Street’s “fear gauge,” retreated from recent elevated levels as bond yields cooled and oil prices stabilised. 

The CBOE Nasdaq Volatility Index (VXN) also moved lower, tracking the decline in the VIX. The CBOE S&P 500 3-Month Volatility Index (VIX3M) showed a more modest decline, reflecting some lingering uncertainty about the medium-term outlook. The drop in volatility indices suggested that investors were growing more comfortable with the current market environment despite ongoing geopolitical tensions. 

2-Year Yield at 4.35% as Yield Curve Remains Inverted 

The 2-Year Treasury yield stood at 4.35%, while the 5-Year yield traded at approximately 4.50%. The 10-Year yield was at 4.76%, and the 30-Year yield remained elevated near multi-decade highs. The yield curve remained inverted, with shorter-term yields continuing to trade above longer-term yields – a pattern that has historically preceded economic recessions. 

The inversion persisted despite the pullback in yields from Wednesday’s peaks, reflecting ongoing concerns about the Federal Reserve’s monetary policy trajectory. US Treasury Secretary Scott Bessent doubled long-term Treasury buybacks last month in an effort to support the bond market, but the 30-year yield has climbed back toward its highest level since 2007. 

Also Read : Understanding US Stock Market Timings 

Brent Crude at $96.25, WTI at $92 as Geopolitical Risks Persist 

Brent crude futures traded at $96.25 per barrel, up 0.65%, while WTI crude advanced 1% to $92 per barrel. The gains came despite some stabilisation in prices, with oil holding in a narrow range after earlier declines. Goldman Sachs analysts said markets’ growing ability to adapt to the conflict could limit the upside for crude prices, even if disruptions in the Middle East persist. 

Natural gas futures traded higher, supported by supply concerns. Silver rose in tandem with gold, while copper prices showed modest gains on expectations of stronger demand. The commodities complex remained sensitive to geopolitical developments, with any escalation in the US-Iran conflict likely to drive prices higher. 

Euro Edges Higher to $1.12, Pound Gains to $1.32 

The euro strengthened against the dollar, with EUR/USD trading at approximately 1.1200, up 0.2% on the session. The British pound also gained, with GBP/USD rising to 1.3200 as the dollar weakened broadly. The USD/JPY pair traded at 156.10, reflecting the yen’s 1% appreciation against the greenback. 

The US Dollar Index (DXY) fell 0.31% to 99.29, extending its recent decline. The dollar’s weakness was attributed to a combination of factors, including the retreat in Treasury yields, the strengthening yen, and reduced safe-haven demand as markets stabilised. The USD/CNY pair remained relatively stable, with the Chinese yuan holding its ground against the dollar. 

The moderation in Treasury yields from 4.81% and stabilising oil prices above $95 provided the immediate catalyst for Thursday’s market rally, though geopolitical risks and the Federal Reserve’s rate trajectory remain key variables. Investors should monitor Friday’s jobs report and next week’s inflation data, as these will significantly influence the September rate decision. The divergence between AI-driven tech winners like Nvidia and challenged names like Broadcom underscores the importance of earnings execution in the current environment. 

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