US EQUITY OPEN: Dovish Waller helps push indices higher although AVGO guidance underwhelms

OPEN: US indices opened in the green with futures bolstered in the pre-market after dovish comments from the influential Fed Governor Waller; he is to support holding policy rate steady at September FOMC meeting if August inflation data shows continued progress, but he did caveat that if it came in hot, he would consider a September rate hike. Following his remarks, and his Q&A, Treasuries, spot gold, and US indices saw strength, while the Dollar weakened. In the FX space, all G10 peers are up vs. the Dollar with the Yen the clear gainer and extending on its strength seen on Wednesday; USD/JPY hit a low of 155.39 and currently sits at 155.65. WTI and Brent are firmer c. by USD 0.70/bbl in light geopolitical newsflow, for a change. On the US data footing, initial jobless claims were more-or-less unchanged, Challenger Layoffs rose, but saw the lowest August print since 2022, while S&P Global services PMI was revised to 56.5, shy of the expected 56.8, ahead of ISM Services at the top of the hour. Sectors are predominantly in the green with Communication Services and Consumer Discretionary outperforming, with only Health, Consumer Staples, and Materials in the red. In terms of stock specifics, Snowflake (+21%) surges post-results, while Broadcom (-6%) is hit after disappointing guidance.

• Microsoft (MSFT) will begin disclosing quarterly Azure sales
• Broadcom (AVGO): Next Q rev. & margin outlooks light, outweighing stronger Q results & raised longer-term AI rev. forecast
• Hewlett Packard Enterprise (HPE): Solid results & lifted outlook but a FY27 earnings growth view miss, and persistent supply constraints, particularly in memory & other components, weigh.
• Snowflake (SNOW): Strong Q metrics alongside raising FY rev. & margin outlook
• PVH (PVH): Top & bottom line surpassed Wall St. exp.
• Ciena (CIEN): EPS & rev. beat w/ solid FY top line outlook
• Victoria's Secret (VSXY): Rev. slightly missed
• Campbell's (CPB): Top & bottom line slightly short, cut Q div. & guided FY27 below est.
• Tyson Foods (TSN) cuts its FY26 revenue outlook to +1.5-2% (prev. +2.5-3.5%), citing additional pressure in its beef segment in Q4.

Sessions driven by a single official's conditional framing have a familiar shape: the front end, the dollar, and rate-sensitive equity leadership all move together in the direction of the perceived policy signal, and they tend to retrace if the subsequent data fail to validate it. The notable feature here is the explicit two-sided conditional, steady policy if the next inflation print shows progress, a hike entertained if it runs hot, which converts the coming inflation release into the binary event around which positioning will cluster; that kind of framing historically raises the volatility attached to the print itself rather than resolving anything in advance. Waller's prior form is as an influential voice whose remarks have, on previous occasions, prefigured the committee's centre of gravity, which is why his conditional carries more weight than equivalent comments from the wings. The cross-asset pattern on the day, Treasuries firmer, dollar softer, gold bid, yen leading G10, is the standard template for a dovish repricing at the front of the curve rather than a level shift further out. On the equity side, the split between a beat-and-raise software name and a guidance-led selloff in an AI-exposed semiconductor is the recurring pattern in this earnings cycle: reported quarters matter less than forward revenue and margin guides, and AI-linked names are being punished for anything short of raised outlooks. The follow-ons worth noting are whether other Fed officials echo the conditional framing, the ISM services print due within the session, and whether the yen's strength persists into the next set of Japanese policy communication.