Waller speaks. The hike becomes a coin flip

Rundown · 2026-09-04

One governor undid four sessions of repricing. Christopher Waller said he would "be inclined to support holding the target for the federal funds rate at its current setting" if disinflation continued, and hike odds fell from 63% to 50.3% on the spot. The Dow rose 624 points for its best day in a month and gold jumped 2.84%. Separately, Nvidia confirmed a $12.93B deal for Hugging Face.

Market Performance

Dow: 53,686.11 (+1.18%) — +624.16 pts, its best day in a month
Nasdaq: 26,584.06 (+1.40%) · S&P: 7,747.71 (+1.06%) · Russell: 2,968.28 (+0.51%), the laggard
10Y eased to 4.77%, with the 2Y and 30Y off their highs too
Gold $4,539.90 (+2.84%) — up $125.30, its biggest day of this cycle
WTI $91.30 (+0.32%) · Brent $95.52 · Bitcoin near $81,000, up ~5%

Waller Breaks the Hawkish Run

Waller is moving toward voting to hold in September, citing three-month annualized inflation falling steadily from 4.76% in February
Hike odds fell 63% to 50.3% — a coin flip. They were ~36% before Warsh spoke a week ago and 67% on Tuesday
Warsh set the framework; Waller is a vote. The market priced the reaction function without checking the committee
Gold's 2.84% jump is the cleanest read. It fell from $4,643.40 to $4,396.40 across four hawkish sessions and took back over half in a day
What did not change: ISM services beat at 55.4, and crude closed higher a fourth session

The Data Cut Both Ways

Claims rose to 206,000 against 205,000 expected; continuing claims ~1.78M
Q2 productivity unrevised at 1.4%, with unit labor costs revised down to 1.2% — quietly the most dovish item on the page, since that is how wages become inflation
Payrolls land this morning: ~65,000, unemployment rising to 4.2% — one tick above the 4.1% Warsh called full employment a week ago

Notable Movers

(MSTR) +17.5% — Its biggest single day since February as bitcoin rose ~5% to near $81,000. Holdings now around 845,050 BTC
(HOOD) +16% — A Deutsche Bank note on prediction-market tailwinds; Morgan Stanley's upgrade and $150 target was Tuesday. Its figure is the striking one: just 7% of Robinhood's base uses them
(VSXY) -13% — Beat on Q2, then guided Q3 operating income to $10-20M against a $24.4M estimate. The beat included $140M+ of one-time tariff refunds
(AVGO) -6% — AI revenue up 221% to $16.7B and guided to double to $115B in FY27 — and it fell because a $34.8B Q4 guide missed $35.05B by 0.7%

Private Dealmaking

Hugging Face, acquired by Nvidia — $12.93B
Wonderful, enterprise AI at a $5B valuation — $550M
Upwind, cloud security at $3.8B — $300M
Medici Brands, David Protein's parent — $250M
Lyte, robot perception, ex-Apple Face ID — $165M
iPronics, optical switching, Nvidia participating — $125M

TLDR

Dow +624.16 (+1.18%), best day in a month; Nasdaq +1.40%, S&P +1.06%
Hike odds fell 63% to 50.3% after Waller signalled a hold — 36% a week ago, 67% Tuesday
Nvidia is buying Hugging Face for $12.93B — 3M models, 18M users; AMD and Intel support stays
AVGO -6% on a 0.7% guide miss despite 221% AI growth; MSTR +17.5%, HOOD +16%

The Bottom Line

A week ago Warsh told the market the Fed had work to do and the whole curve believed him. Thursday one governor said he was inclined to hold and half of it came back out. The lesson is not that Waller outranks the chair — it is that a hawkish chair still needs a committee, and the market priced the framework without checking the votes. Underneath the noise, Nvidia paid $12.93 billion for Hugging Face, deciding that owning where models live is worth as much as owning what they run on. Payrolls arrive this morning with September at exactly fifty-fifty.

_For informational purposes only. Not investment advice._