U.S. stocks rallied hard on September 3, with the S&P 500 posting its biggest one-day gain in nearly a month as dovish signals from Federal Reserve officials fueled expectations that interest rates may have peaked.

The benchmark index rose 1.06% to close at 7,747.71, recording its largest single-session advance in roughly a month. The gains came as Treasury yields pulled back, easing pressure on equities and helping lift a broad swath of the market.

The Nasdaq Composite climbed 1.4% to 26,584.06, while the Dow also advanced, with all three major indices finishing the session at least 1% higher.

Traders interpreted the Fed officials' comments as hinting that the central bank could be nearing the end of its tightening cycle, or potentially considering a shift toward a more accommodative stance. Falling bond yields typically benefit growth and technology stocks, which are sensitive to borrowing costs.

Analysts said the move reflects improving risk appetite, though they cautioned that markets remain sensitive to incoming inflation data and central bank messaging in the weeks ahead.