The Globe and Mail reports in its Friday edition that stocks rallied on Thursday as investors curbed their rate-hike bets after U.S. Federal Reserve governor Christopher Waller said he would support holding the Fed funds target rate steady if data show inflationary pressures are abating. A Reuters dispatch to The Globe says the three big U.S. stock indexes closed at least 1 per cent higher, with Nasdaq enjoying a boost from the Magnificent Seven group of artificial-intelligence-related megacap stocks. Toronto outperformed all three, gaining 1.5 per cent. Mr. Waller told Reuters he would be inclined to let key interest rates stand should upcoming data confirm that price pressures are easing, but added he would support a rate hike if inflation fails to cool down. Following Mr. Waller's remarks, financial markets moderated expectations for rate hikes at the Fed's September meeting, lowering the likelihood to 50.4 per cent from 63.2 per cent on Wednesday. The benchmark 10-year U.S. Treasury yield pulled back for the second straight session after touching its highest level since November, 2023. Data showed Canada's trade surplus narrowed sharply in July. The S&P/TSX Composite Index rose 541.51 points to 36,633.12.