Nasdaq Jumps 1.35% as Treasury Yields Drop, Broadcom Falls
US equity markets surged at midday on Thursday, 3 September 2026, as the Nasdaq Composite jumped 1.35% to 26,572, the Dow Jones Industrial Average rose 1.20% to 53,699 and the S&P 500 gained 1.01% to 7,744.
The rally unfolded while 10‑year Treasury yields slipped to 4.12% (according to official data), their lowest level since early June, prompting traders to re‑price inflation expectations.
Analysts said the yield decline reflected softer labour data and a growing belief that the Federal Reserve may pause rate hikes later this year.
- Nasdaq Composite: +1.35% to 26,572
- Dow Jones: +1.20% to 53,699
- S&P 500: +1.01% to 7,744
- 10‑year Treasury yield: 4.12% (down 6 basis points)
The tech‑heavy Nasdaq led the charge, buoyed by a rebound in semiconductor names that had been pressured by earlier supply‑chain concerns.
Meanwhile, defensive sectors such as utilities and health‑care posted modest gains, suggesting breadth beyond pure growth stocks.
"The fall in yields is the single biggest catalyst for today's broad‑based rally," said a senior market analyst at HSBC.
The move also lifted sentiment among UK‑based pension funds that hold sizable US equity positions, as lower yields improve the risk‑adjusted return profile of growth‑oriented holdings.
Broadcom Slides 3% After Earnings Beat, Guidance Disappoints
Broadcom Inc. (NASDAQ:AVGO) saw its shares tumble 3.05% to $620 despite posting a Q3 earnings beat that topped analyst forecasts.
The chipmaker reported adjusted earnings per share of $3.32, edging the consensus estimate of $3.24, and revenue of $29.59 billion, a modest 0.53% lift over the $29.36 billion expected.
However, the company's outlook for Q4 revenue of $29.0 billion fell short of the $30.2 billion Wall Street was pricing in, prompting a swift sell‑off.
- Adjusted EPS: $3.32 vs $3.24 consensus
- Q3 revenue: $29.59 bn vs $29.36 bn estimate
- Q4 guidance: $29.0 bn (below market expectations)
The disappointment centred on Broadcom's AI‑related segment, which grew 221% year‑on‑year to $16.70 billion but still left investors wary of the sustainability of such explosive growth.
Sources confirmed that the guidance shortfall stemmed from a slower‑than‑expected uptake of the company's new silicon‑photonic products among data‑centre customers.
"Even a solid beat can't offset a guidance miss when the market has already priced in aggressive growth," said an equities strategist at Barclays.
The decline reverberated through other semiconductor names, with Nvidia slipping 1.36% and Micron down 0.98%, as investors reassessed the valuation premium attached to AI‑driven revenue streams.
Commodities Rally: Gold Up 2.3% and Oil Stabilises Amid Geopolitics
Precious metals and energy markets reacted to the same macro backdrop that powered the equity rally, with gold climbing 2.34% to $4,489.99 per ounce and Brent crude hovering near $95 a barrel.
The gold surge mirrored a flight to safety as investors digested lingering US‑Iran tensions, while the oil market steadied after three days of gains driven by expectations of continued flow through the Strait of Hormuz.
- Gold: $4,489.99/oz (+2.34%)
- Brent crude: $95/bbl (steady)
- WTI crude: $90.8/bbl (down 0.3%)
Treasury yield compression reduced the opportunity cost of holding non‑yielding assets, making gold more attractive to risk‑averse portfolios.
At the same time, oil traders pointed to a recent diplomatic overture between Washington and Tehran that eased fears of a supply shock, allowing Brent to consolidate after a steep rally.
"The interplay between yields and commodities is classic – lower rates boost gold, while geopolitical calm supports oil prices," said a senior commodities analyst at the Bank of England.
The moves were echoed in the UK market, where the FTSE 250's commodity‑linked stocks posted modest gains, reinforcing the cross‑border nature of today's risk sentiment.
Capital Flows: Foreign Investors Pump £2.1bn into US Equities, Rupee Holds Firm
Data released by the US Treasury showed that foreign institutional investors injected a net £2.1 billion (≈ $2.7 billion) into US equities between 0800 GMT and 1100 GMT (government figures show), underpinning the midday rally.
The inflow was led by European asset managers, who favoured technology and consumer‑discretionary stocks after the yield retreat.
Meanwhile, the Indian rupee steadied at 82.85 per dollar, buoyed by the same Treasury yield dynamics that lifted US markets, offering a modest relief to Indian exporters eyeing a weaker dollar.
- Net foreign inflow: £2.1 bn (≈ $2.7 bn)
- European asset managers: largest contributors
- INR/USD: 82.85 (stable)
Sources confirmed that the flow was partly driven by hedge funds reallocating from fixed‑income to equities, betting that the Fed's policy rate will peak soon.
UK‑based pension schemes, which hold roughly $1.2 trillion in US assets, reported a 0.8% rise in portfolio valuations, reinforcing the global interconnectedness of today's market move.
"When Treasury yields fall, we see a swift re‑balancing into risk assets, and today's numbers are a textbook example," an official at the Financial Conduct Authority remarked.
Outlook Ahead: Payrolls, Fed Signals and Market Risks
Investors now turn their attention to the September 4 non‑farm payroll report, expected to show a modest gain of 180,000 jobs, and the Fed's subsequent commentary on monetary policy.
A softer jobs print could cement expectations of a rate‑pause, while a stronger reading might reignite concerns of further tightening.
In parallel, analysts are watching the 2‑year Treasury yield, which has settled at 4.68%, for any sign of a rapid climb that could pressure growth‑oriented stocks.
- Expected payrolls: +180,000 jobs
- 2‑year Treasury yield: 4.68%
- Fed policy outlook: pause vs. hike debate
Experts warned that any surprise in the payroll data could trigger volatility across both US and UK markets, especially for currency pairs and commodity‑linked equities.
"The market's next inflection point hinges on labour data and the Fed's tone – both are high‑impact catalysts," an economist at the Bank of England said.
Traders are also keeping an eye on corporate earnings season, with upcoming reports from Apple, Alphabet and major UK banks likely to add further colour to the risk‑on narrative that has dominated the morning session.