Thursday, September 3, 2026
Stocks Surge as Fed's Waller Signals Openness to Holding Rates Steady, Nvidia Buys Hugging Face for $12.9B, Campbell's Craters on Dividend Cut
Key Indicators
S&P 500
7,739.53
+0.95% (up)Nasdaq Composite
26,550.96
+1.27% (up)Dow Jones Industrial Average
53,639.51
+1.09% (up)10-Year Treasury Yield
4.74%
-5 bps (down)VIX
14.61
-3.88% (down)WTI Crude Oil
$91.22
+0.23% (up)Gold
$4,541.90
+2.88% (up)Bitcoin (BTC/USD)
~$77,900
+0.7% (up)Market Recap
S&P 500, Nasdaq, Dow surge after Fed's Waller signals he could back holding rates steady in September
Stocks rallied hard Thursday after Fed Governor Christopher Waller said he would likely support holding the federal funds rate steady at the September 15-16 FOMC meeting if upcoming inflation data continues to improve. Waller noted that three-month annualized inflation has fallen steadily from 4.76% in February, calling the trend "encouraging." Traders responded by slashing the odds of a September rate hike from 63% the day before to roughly 50-55%. The S&P 500 rose 0.95% to close at 7,739.53, the Nasdaq Composite jumped 1.27% to 26,550.96, and the Dow gained 1.09% to 53,639.51. The 10-year Treasury yield fell 5 basis points to 4.74%, and the VIX dropped 3.88% to 14.61 as fear of an imminent hike eased.
Nvidia agrees to buy Hugging Face for roughly $12.9 billion, its second-largest deal on record
Nvidia confirmed it will acquire AI model-hosting platform Hugging Face for about $12.9 billion — roughly $11.9 billion payable to Hugging Face stockholders plus an equity retention program worth up to $1 billion for employees joining Nvidia. Hugging Face's platform hosts 3 million AI models, 1 million applications, and 500,000 datasets used by more than 18 million developers. CEO Jensen Huang said Hugging Face will keep supporting open-source and open-weight models. The deal is expected to close in the first half of 2027, pending regulatory approval, and marks Nvidia's second-biggest acquisition on record. Nvidia shares rose about 1% on the news.
Campbell's stock craters as company slashes dividend 36%, guides sales lower for a fourth straight quarter of declines
Campbell's shares fell as much as 13% in premarket trading and closed down about 9.75% after the packaged-food maker reported a fourth consecutive quarter of declining sales and issued a weak outlook. Fiscal Q4 sales fell 8% to $2.13 billion, roughly in line with estimates, but fiscal 2027 guidance disappointed: the company projected sales down 2-4% versus the -0.8% Wall Street expected, and adjusted EPS of $1.65-$1.80 versus the $1.86 consensus. Campbell's also cut its quarterly dividend 36%, to $0.25 a share from $0.39, to accelerate debt reduction, and announced a plan to cut roughly $500 million in costs by fiscal 2030 through plant closures and workforce reductions. The company said lower-income consumers are increasingly trading down to cheaper store-brand products after years of price increases.
Broadcom slides despite beating on both lines as investors punish a soft AI-revenue guide
Broadcom fell roughly 5% Thursday even after beating fiscal Q3 estimates: adjusted EPS of $3.32 and revenue of $29.6 billion, up 86% year-over-year, with AI semiconductor revenue surging 221% year-over-year to $16.7 billion. The selloff came down to guidance — Broadcom projected fiscal Q4 revenue of about $34.8 billion, short of the $35.03 billion analysts expected. For a stock this heavily priced for AI-driven growth, a beat-and-raise that falls short of the highest bar wasn't enough to satisfy investors.
Jobless claims tick up to 206,000, ISM Services expands to 55.4% but hiring contracts again — mixed labor setup for Friday's jobs report
Initial jobless claims rose to 206,000 for the week ending August 29, slightly above the 205,000 estimate and up from a revised 204,000 the prior week; the four-week average climbed to 207,250. Separately, the ISM Services PMI rose to 55.4% in August from 54.1% in July — the 26th straight month of expansion — as the Business Activity Index jumped to 61.7% and New Orders rose to 60.9%. But the survey's Employment Index contracted for a second straight month at 47.8%, echoing the softness in Tuesday's ADP report, which showed private employers added just 38,000 jobs in August, the weakest since January. The mixed data sets up Friday's official August jobs report — due at 8:30am ET — as the last major labor read before the Fed's September 16 rate decision.
Concept of the Day
Market-Implied Rate Odds (Fed Funds Futures)
When headlines say traders "cut the odds of a September rate hike from 63% to 50%," that probability isn't a poll or a guess — it's backed out of real money in the Fed funds futures market. These contracts let traders bet directly on where the effective fed funds rate will average out over a given month. By comparing a contract's price to the current fed funds rate, you can solve for what the market is implicitly pricing as the probability of each possible outcome at the next FOMC meeting (hold, 25bp hike, 25bp cut, etc.). The CME's FedWatch tool automates this calculation and is the most widely cited version of it. These odds move constantly and often violently on a single data point or a single Fed official's comments, because futures prices adjust in real time as new information arrives — unlike a survey, which only updates when someone re-polls it. That's exactly what happened today: within hours of Governor Waller's comments about easing three-month inflation, September hike odds swung by roughly 10-13 percentage points, and that repricing flowed straight through to Treasury yields, the dollar, and equities. It's important to treat implied odds as a market-clearing price, not a forecast. They reflect the aggregate position of everyone trading the contract at that moment — including hedgers, not just directional bettors — and they can be wrong. But because they represent real capital at risk, they're generally a better real-time gauge of rate expectations than economist surveys, which is why trading desks watch them tick-by-tick around FOMC meetings.
Why it matters
Today is a live case study: within hours of Waller's comments, September hike odds swung from 63% to roughly 50-55%, and that single repricing moved the 10-year yield down 5 basis points, sent the VIX down nearly 4%, and helped drive the S&P 500's best day in weeks. Understanding how those odds are calculated — and how fast they can move on one official's remarks — explains why markets can swing so sharply around Fed speakers, and why professional traders watch Fed funds futures pricing far more closely than they watch economist surveys heading into the September 16 decision.
What to Watch
Fri, Sep 4
August Jobs Report (Nonfarm Payrolls)
The last major labor data point before the Fed's September 16 decision, and a bigger deal than usual after this week's soft ADP print and mixed ISM employment reading.
Fri, Sep 11
Consumer Price Index (August)
The last inflation reading before the Fed's September decision — and a key test of the disinflation trend Waller cited today.
Wed, Sep 16
FOMC Rate Decision
The Fed decides whether to hike or hold — a genuinely live question after Waller's comments moved hike odds to roughly a coin flip.