US Open: Dovish Waller supports the stock market (03.09.2026)

We are fast approaching the Federal Reserve meeting scheduled for 16 September. The odds of an interest rate hike can currently be likened to a coin toss. On Friday, Fed Chair Kevin Warsh bolstered expectations for tighter monetary policy with his speech in Jackson Hole. Today, markets received much more dovish communications from FOMC member Christopher Waller.

Bets on rate hikes this autumn have fallen, providing support to the equity market. The Nasdaq 100 is rising by 0.5% today, with similar moves observed in the S&P 500 and Dow Jones. Intriguingly, long term expectations have moved in the opposite direction, which is a factor favouring both gold and Bitcoin.

Figure 1: Change in Market Implied Probability of Interest Rate Hikes at Individual Federal Reserve Meetings (2026 - 2027)

Źródło: XTB Research, 03.09.2026

What Did Waller Actually Say?

Unlike Warsh, Waller managed to outline the specific factors he will be monitoring when making the September decision. He stated that the disinflation process is continuing, and core inflation essentially looks even better than the headline indicators suggest. He noted that if the upcoming CPI inflation reading (scheduled for 11 September) does not present a negative surprise, he will most likely support keeping interest rates unchanged at the next meeting.

Data Returns to Favour

The volatility accompanying recent releases of key macroeconomic data from the United States has been elevated, and in the current situation, there is little to suggest this will change. Tomorrow, the most important US labour market report will be released (NFP data, 1:30 PM). Exactly one week later, as we wrote previously, inflation data for August will be published, which, as Waller emphasised, could determine the committee’s decision.

It is worth recalling here that the midterm elections are scheduled for November. While higher interest rates would not significantly impact mortgage repayments (more than 80% of these are based on fixed interest rates), they would likely lead to a return of the debate on rising living costs and inflation, which is certainly not in the Republicans' interest. We could also expect declines in the stock market.

Trump himself can, of course, influence market expectations regarding interest rate hikes through his actions and rhetoric regarding the war in the Middle East. Signals that lead to a fall in energy commodity prices could influence a reduction in the need for monetary tightening in the eyes of the market. Any progress in negotiations would also likely have a positive impact on almost all assets that are among my picks.

Debasement trade?

A lack of a hike and/or any signals indicating a lack of full independence from Warsh, as well as further actions by the Treasury Department in the debt market, could lead to a further weakening of the dollar and investors seeking alternatives.

A lack of a hike would also favour technology companies, improving their valuations in DCF (discounted cash flow) models. The risk here is an increase in long term concerns and a rise in long term bond yields.

Brak podwyżki sprzyjałby także spółkom technologicznym, poprawiając ich wyceny w modelach DCF (dyskontowania przyszłych przepływów pieniężnych). Ryzykiem jest tu wzrost obaw długoterminowych i podbicie rentowności długoterminowych obligacji. 

Company News

Figure 2: Winners and Losers in the Nasdaq 100 (03.09.2026)

Źródło: XTB Research, 03.09.2026

Snowflake ($SNOW.US) 

Shares of the technology company creating tools for data storage, processing, and analysis are up more than 20% today. This is, of course, the result of very good second quarter results, which significantly beat market expectations. Investors' attention was drawn in particular to the rapid adoption of its AI-based programming assistant. According to analysts, this is clear evidence that AI-driven consumption trends are finally starting to translate into real company results.

Broadcom ($AVGO.US) 

The bar for Broadcom was set very high. Despite publishing ambitious long term forecasts, shares of the chipmaker are down by approx. 6.5%. The company predicts that its AI chip revenues will double to around $115 billion in fiscal year 2027 and reach $230 billion a year later. Worth noting is the announced reshuffling in the order book for dedicated integrated circuits, in 2027, Anthropic is set to take the position of Broadcom’s largest client, overtaking OpenAI and pushing down the current leader, Google. Additionally, the company predicts that the networking infrastructure segment will grow as quickly as demand for the processors themselves.

Ultragenyx Pharmaceutical ($RARE.US) 

Shares of the biotechnology company are down by over 45%. The rapid sell-off is the result of a failure in a key phase III clinical trial for apazunersen (GTX-102), designed to treat a rare genetic disorder, Angelman syndrome. The preparation did not meet the primary endpoint of the study regarding cognitive function improvement, which immediately triggered a wave of analyst downgrades from Wall Street.

Campbell’s ($CPB.US) 

Shares of the food giant are down by more than 10%. The sell-off was driven by disappointing financial forecasts for the coming years, including estimates for adjusted earnings per share, which proved significantly lower than analyst expectations. An additional blow for shareholders was the board’s decision to cut the quarterly dividend by more than one third.