U.S. stock index futures rose Thursday after Federal Reserve Governor Christopher Waller said he would support holding interest rates steady, easing investor concerns about an imminent rate hike.
S&P 500 futures were 0.4% higher, Nasdaq-100 futures added 0.2%, and Dow Jones Industrial Average futures advanced 339 points, or 0.6%. The 10-year Treasury yield fell to around 4.75% after Waller said he would be "inclined to support" keeping rates unchanged, provided that upcoming inflation data does not deliver surprises, according to CNBC .
Wednesday's session saw the 10-year yield reach as high as 4.818%, a peak not seen since November 2023, though it settled lower by the close. The 2-year yield similarly climbed to 4.41%, last seen at that level in January 2025, before retreating.
Waller's comments shifted expectations among traders in fed funds futures markets. Odds of a rate increase at the Fed's next meeting dropped to 54.6%, down from 63.2% the day before, according to CNBC, citing the CME FedWatch tool.
A rally in the Japanese yen also contributed to the decline in Treasury yields. The yen rose more than 1% against the U.S. dollar to 156.1 yen, extending a two-day gain of nearly 3%, according to The Wall Street Journal . Comments from a Bank of Japan board member struck a hawkish tone Wednesday, leading markets to price in the prospect of steeper or more regular rate hikes in Japan and a resulting boost to the yen.
"A stronger JPY could be the thread that helps unravel a lot of the macro overhangs weighing on equities to the extent it continues," Adam Crisafulli of Vital Knowledge said.
Oil prices continued to climb, with West Texas Intermediate crude futures up 1% at around $92 per barrel and Brent crude futures up less than 1% to above $96. Elevated crude prices have weighed on the bond market, with traders concerned that persistent energy costs could push inflation higher and prompt the Fed to act on rates.
New York Fed President John Williams said in a Wednesday interview with CNBC that he interprets the rise in Treasury yields as a sign of an economy on solid footing, pointing to second-quarter corporate profits that broke records.
Thursday's gains came after the major U.S. stock indexes snapped three-day losing streaks in the prior session.
