The S&P 500 Index ($SPX) (SPY) closed up by +0.72% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.20%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +1.43%. E-mini S&P futures (ESU26) rose +0.68%, and September E-mini Nasdaq futures (NQU26) rose +1.40%.
Stock indices settled higher on Thursday, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting 1-week highs. A blowout outlook from Nvidia bolstered confidence in the artificial intelligence trade and powered technology stocks higher on Thursday. Nvidia rallied more than +8%, leading chipmakers and AI-infrastructure stocks higher after issuing a revenue growth forecast for fiscal 2028 far above expectations. Also, a $31 billion joint venture between Sandisk and Kioxia Holdings to ratchet up flash memory production added to the bullish tone in technology stocks. In addition, cybersecurity stocks rallied on Thursday after better-than-expected earnings from Okta and CrowdStrike Holdings, and software stocks rose after Salesforce forecasted revenue above consensus.
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Signs of strength in the US labor market are positive for economic growth and stocks after weekly initial unemployment claims unexpectedly fell -4,000 to 203,000, showing a stronger labor market than expectations of an increase to 208,000.
Hawkish Fed comments on Thursday were bearish for stocks and bonds. Kansas City Fed President Jeff Schmid said current Fed policy is not restraining the economy while inflation continues to run above its 2% target. He added that the interest rate setting "might be accommodative on the short end" and that "we've got work to do." Also, Cleveland Fed President Beth Hammack said now is the time to act to contain inflation, and "I think it's appropriate for the Fed to put some restraint there to help bring inflation back down to target."
Oct WTI crude oil prices (CLV26) rallied more than +1% on Thursday after a Wall Street Journal report said the US has no interest in returning to the terms of the deal it signed with Iran in June, casting doubt on oil flows from the Middle East returning to normal anytime soon. Crude prices also rose on a Bloomberg report that said Russia was planning to escalate the war in Ukraine, which could disrupt Russian crude output and lower global oil supplies.
The outlook for strong Q2 earnings is a bullish factor for stocks. The S&P 500 is tracking for earnings growth of almost 32% in Q2, well above projections of +23%, and nearly four times the average earnings growth rate outside of the Covid period since Q4 of 2013, according to Bloomberg Intelligence. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2. So far, earnings results have been positive, with 86% of the 478 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data.
The markets are discounting a 33% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 closed down -0.71%. China's Shanghai Composite climbed to a 1-week high and closed up +1.13%. Japan's Nikkei-225 Stock Average fell from a 1-week high and closed down -0.20%.
Interest Rates
September 10-year T-notes (ZNU6) closed down by -2.5 ticks on Thursday. The 10-year T-note yield rose +1.0 bp to 4.670%. Strength in stocks on Thursday curbed safe-haven demand for government debt and weighed on T-note prices. Also, an unexpected decline in weekly US jobless claims was bearish for T-notes. In addition, hawkish Fed comments on Thursday from Kansas City Fed President Jeff Schmid and Cleveland Fed President Beth Hammack undercut T-notes when they said interest rates aren’t restraining the economy. Finally, the +1% rally in WTI crude oil on Thursday raised inflation expectations and weighed on T-notes.
Losses in T-notes were limited as short covering emerged ahead of Fed Chair Warsh’s speech at the Fed’s annual symposium in Jackson Hole, Wyoming, on Friday. Also, decent demand for the Treasury’s $44 billion of 7-year T-notes was supportive for T-notes, as the auction had a bid-to-cover ratio of 2.50, above the 10-auction average of 2.48.
European government bond yields were mixed on Thursday. The 10-year German bund yield rose +1.9 bp to 3.253%. The 10-year UK gilt yield fell -0.1 bp to 5.030%.
Eurozone July M3 money supply rose +3.4% y/y, weaker than expectations of +3.5% y/y.
The German Sep GfK consumer confidence index rose +2.8 to a 6-month high of -26.6, stronger than expectations of -29.5.
Markets are discounting a 97% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.
US Stock Movers
Chipmakers and AI-infrastructure stocks rallied on Thursday after Nvidia reported Q2 revenue of $96.22 billion, well above the consensus of $92.38 billion, and projected fiscal 2028 revenue to grow about 70%. The iShares Semiconductor ETF (SOXX) closed up more than +1%. Nvidia (NVDA) closed up more than +8%, and Intel (INTC) and Broadcom (AVGO) closed up more than +3%. Also, ARM Holdings (ARM), Lam Research (LRCX), Microchip Technology (MCHP), and Texas Instruments (TXN) closed up more than +1%.
Software stocks moved sharply higher on Thursday, led by a +22% surge in Salesforce (CRM), which led gainers in the S&P 500 and Dow Jones Industrials after it forecast Q3 revenue of $11.42 billion to $11.50 billion, with the midpoint above the consensus of $11.42 billion. Also, ServiceNow (NOW) closed up more than +10%, and Atlassian Corp (TEAM) closed up more than +9%. In addition, Datadog (DDOG) and Autodesk (ADSK) closed up more than +6%, and Adobe Systems (ADBE) closed up more than +5%. Finally, Palantir Technologies (PLTR) closed up more than +4%, International Business Machines (IBM) closed up more than 3%, and Oracle (ORCL) and Workday (WDAY) closed up more than +1%.
Cybersecurity stocks soared on Thursday, following stellar earnings results from Okta and Crowdstrike Holdings. Okta (OKTA) closed up more than +28% after boosting its 2027 revenue forecast to $3.22 billion to $3.23 billion from a previous forecast of $3.19 billion to $3.21 billion, above the consensus of $3.20 billion. Crowdstrike Holdings (CRWD) closed up more than +20% to lead gainers in the Nasdaq 100 after raising its 2027 adjusted operating income forecast to $1.50 billion-$1.51 billion from a previous forecast of $1.45 billion-$1.48 billion, better than the consensus of $1.47 billion. Also, Palo Alto Networks (PANW) closed up more than +12%, and SentinelOne (S) closed up more than +10%. In addition, Fortinet (FTNT) and Zscaler (ZS) closed up more than +9%, and Cloudflare (NET) closed up more than +8%.
Cryptocurrency-exposed stocks moved higher on Thursday after Bitcoin (^BTCUSD) rose more than +1%. Strategy (MSTR) closed up more than +11%, and MARA Holdings (MARA) closed up more than +5%. Also, Coinbase Global (COIN) and Circle Internet Group (CRCL) closed up more than +4%, and Riot Platforms (RIOT) and Galaxy Digital Holdings (GLXY) closed up more than +1%.
Veeva Systems (VEEV) closed up more than +15% after reporting Q2 adjusted EPS of $2.35, above the consensus of $2.22, and raising its 2027 adjusted EPS forecast to $9.21 from a previous forecast of $9.05, stronger than the consensus of $9.06.
Nutanix (NTNX) closed up more than +6% after reporting Q4 revenue of $757.1 million, better than the consensus of $738.1 million.
Dollar General (DG) closed up more than +2% after reporting Q2 net sales of $11.29 billion, stronger than the consensus of $11.19 billion, and raising its 2027 comparable sales forecast to up +2.5% to +2.9% from a previous forecast of +2.2% to +2.7%, higher than the consensus of +2.42%.
Wendy’s (WEN) closed down more than -13% after Reuters reported that Trian Fund Management has no plans to make a bid at this time to take the company private.
Hormel Foods (HRL) closed down more than -10% to lead losers in the S&P 500 after reporting Q3 net sales of $2.96 billion, below the consensus of $3.03 billion, and cutting its full-year net sales forecast to $12.1 billion to $12.2 billion from a previous forecast of $12.2 billion to $12.5 billion, weaker than the consensus of $12.24 billion.
Dollar Tree (DLTR) closed down more than -4% after forecasting Q3 net sales of $5.0 billion to $5.1 billion, the midpoint below the consensus of $5.06 billion.
HP Inc. (HPQ) closed down more than -3% after forecasting Q4 adjusted EPS of 69 cents to 79 cents, the midpoint above the consensus of 67 cents, but without an 8-cent-per-share boost from tariff refunds, the outlook would be below consensus.
Earnings Reports (8/28/2026)
Domo Inc (DOMO), Hub Group Inc (HUBG), Liberty Live Holdings Inc (LLYVA), SR Bancorp Inc (SRBK).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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