U.S. markets experienced a rally on Thursday, driven by Federal Reserve Governor Christopher Waller's indication that he would support maintaining interest rates if inflation data aligns with expectations. The S&P 500 saw consecutive gains, while the yield on the benchmark 10-year Treasury note fell to 4.77%, down from a recent high of 4.83%.
The probability of a rate hike at the Fed's September meeting has decreased to 50.2%, down from 63.2% just a day earlier. Waller expressed optimism about current inflation trends, suggesting that recent data shows signs of disinflation, despite inflation remaining above the Fed's 2% target.
In contrast, Vice President JD Vance has called for a reduction in rates to enhance housing affordability, echoing sentiments from former President Donald Trump. This divergence in views among Fed officials highlights uncertainty in monetary policy direction.
Additionally, Lululemon's stock plummeted 15% after the company lowered its annual outlook, citing negative social media commentary and a slowdown in key product categories. Meanwhile, Microsoft announced it will impose monthly time limits on Xbox cloud gaming for subscribers, a move aimed at managing rising costs.
This decision will take effect in November and will offer varying hours of cloud gaming based on subscription tiers