LIVE MARKETS-Wall Street indexes climb more than 1%

The three main U.S. equity indexes finished up more than 1% on Thursday as investors pulled back from prior bets that the Federal Reserve would raise interest rates at its September meeting. However, not all market watchers were convinced the reason behind Thursday's rally was that simple.

Federal Reserve Governor Christopher Waller said, before the market opened at a Reuters NEXT Newsmaker event in Washington, that he is leaning toward keeping interest rates steady at the U.S. central bank's policy meeting this month if the next batch of inflation data shows that price pressures are continuing to moderate.

Also chiming in was U.S. Vice President JD Vance, who said the White House believes the Fed should lower interest rates, arguing that inflation data is worthy of a rate cut.

Traders were last pricing in a 50.4% probability for a hike of 25 basis points at the next meeting, down from 63.2% one day before, according to CME Group's FedWatch tool.

Steve Sosnick, chief strategist at Interactive Brokers, wrote in a research note that Waller's commentary was the most likely reason for Thursday's enthusiasm even as he said: "Quite frankly, the rationale seems a bit tenuous." Sosnick noted that yields had fallen, "reflecting the lower likelihood of near-term rate hikes" and that "other assets had significant moves as well."