12:33 PM EDT, 07/31/2024 (MT Newswires) -- US equity indexes jumped amid broad-based sector gains as government bond yields slumped in anticipation of September rate-cut clues in the Federal Reserve's July policy statement and after Microsoft ( MSFT ) pared overnight share-price declines.

The Nasdaq surged 2.6% to 17,585.6, with the S&P 500 up 1.7% to 5,526.5 and the Dow 0.6% higher at 40,980.5 after midday on Wednesday.

The Federal Open Market Committee's policy statement is expected at 2:00 pm ET, followed by Fed Chair Jerome Powell's press conference at 2:30 pm ET. The CME FedWatch tool showed a 97% probability of no change in July's 5.25% to 5.5% target range. But, in September, the likelihood of a rate cut is 88% as evidence mounts that inflation is sustainably heading toward the Fed's 2% target range amid a softening labor market.

Most Treasury yields were down, with the 10-year 3.8 basis points lower at 4.1% and the 30-year rate down 5 basis points to 4.35%.

In company news, Microsoft ( MSFT ) , late Tuesday, reported stronger-than-expected fiscal fourth-quarter results, though intelligent cloud revenue missed Wall Street's estimates. Shares traded 1.7% lower intraday after slumping more than 6% in after-hours activity on Tuesday.

ASML ( ASML ) will likely be on a list of chip companies exempt from a sweeping new trade restriction targeting China, media reports said Tuesday, citing people familiar with the matter.

Media reports speculated the US government is preparing to implement new export limits to keep China from accessing advanced semiconductor technology. ASML ( ASML ) and other companies in the Netherlands, where ASML ( ASML ) is based, and Japan would be exempt from the curbs. Shares of Nvidia ( NVDA ) , Broadcom ( AVGO ) , Micron Technology ( MU ) , and ASML ( ASML ) jumped intraday.

All sectors in the three mainstream indexes were up intraday, with technology, consumer discretionary, and communication services pacing the gainers. The rally was broad-based, including utilities, industrials, and materials.

In economic news, ADP's monthly measure of private payrolls showed a 122,000 increase in July, below expectations compiled by Bloomberg for 150,000. The July print followed an upwardly revised 155,000 increase in June.

West Texas Intermediate crude oil jumped 3.6% to $77.42 a barrel.