The US markets ended higher on Thursday after Federal Reserve Governor Christopher Waller suggested that another rate hike may not be necessary if upcoming inflation data remains moderate. Traders took support with the Institute for Supply Management (ISM) revealed in a report that the ISM Services PMI rose to 55.4 in August 2026 from 54.1 in July, beating forecasts of 54.3. The reading pointed to the strongest gain in the services sector in six months, with business activity (61.7 vs 59.1), new orders (60.9 vs 57.2), inventories (56.7 vs 51.4) all rising at a faster pace. Some support also came as a report released by the Labor Department showed US nonfarm business-sector labor productivity rose 1.4% in the second quarter of 2026, unchanged from the preliminary estimate, following a 0.8% increase in the first quarter. Output increased 1.7% and hours worked increased 0.3%, both in line with the initial estimates. Traders overlooked the Commerce Department released a report showed the US trade deficit widened to $88.6 billion in July 2026, marking the largest gap since March 2025, compared with a $71.1 billion shortfall in June and market expectations of a $90 billion deficit.
Dow Jones Industrial Average rose by 624.16 points or 1.18 percent to 53,686.11, Nasdaq increased by 366.23 points or 1.4 percent to 26,584.06 and S&P 500 was up by 81.11 points or 1.06 percent to 7,747.71.
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