Stocks Bounce Back as Fed Official Says Rate Hike Is Not a Sure Thing

TLDR

The Dow, S&P 500, and Nasdaq all rose Wednesday after losing ground earlier in the session New York Fed President John Williams said there are “no clear signs” a September rate hike is needed Oil prices steadied near $95 a barrel for Brent crude as the Iran conflict continues ADP data showed the US private sector added only 38,000 jobs in August, below the 47,000 estimate The 10-year Treasury yield held at 4.79%, its highest level since 2023

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US stocks bounced back on Wednesday as oil prices paused their climb and a Federal Reserve official lowered expectations for a rate hike in September.

The Dow Jones Industrial Average rose around 0.4%, or about 236 points. The S&P 500 gained 0.49% and the Nasdaq Composite added 0.45%, recovering from losses earlier in the day.

E-Mini S&P 500 Sep 26 (ES=F)

Fed Official Eases Rate Hike Fears

New York Fed President John Williams told CNBC on Wednesday that there were “no clear signs right now” that a rate hike in September would be necessary to bring down inflation.

Williams also suggested that rising bond yields may reflect a strong economy rather than rising inflation expectations. That comment gave markets a bit of breathing room.

The 10-year Treasury yield held at 4.79% on Wednesday, its highest point since 2023. The 30-year yield stood at 5.26%.

Andy Goldberg, chief investment strategist at Nomura Asset Management International, said the session’s gains were driven more by a lack of bad news than any major catalyst.

“When you do have a lack of clear catalyst and the market’s been down for a few days, investors don’t feel as bad buying the dips,” Goldberg said.

He also noted that high yields have kept a lid on stock valuations after a strong earnings season, making some stocks look more attractive on a dip.

Oil Prices and Iran Conflict in Focus

Oil prices were a key focus for markets this week. Brent crude futures traded near $95 per barrel and WTI crude held near $90 per barrel.

The Iran conflict continued to weigh on sentiment. President Trump on Tuesday threatened to hit Iran “much harder” if it retaliates against US airstrikes. Iran said it is targeting US military bases in Jordan and Bahrain.

Stocks had initially fallen earlier in the session before recovering as oil prices pulled back slightly.

On the jobs front, ADP data showed the US private sector added 38,000 jobs in August. That came in below economist estimates of 47,000 and could signal a softer reading in Friday’s official monthly jobs report.

Broadcom and Snowflake were both set to report earnings after Wednesday’s closing bell, adding another layer of attention for investors.

The session’s gains were modest overall, but offered some relief after several days of losses on Wall Street.

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