The stock market experienced a significant rebound on Thursday, following a challenging start to the week. Better-than-expected jobless claims data helped alleviate recession fears, leading to a surge in major indices such as the Dow Jones Industrial Average, Nasdaq, and S&P 500.
Key Takeaways
- Dow Jones Industrial Average gained 683 points, or 1.8%
- Nasdaq composite rose by 2.9%
- S&P 500 increased by 2.3%, marking its best day since November 2022
- First-time unemployment claims fell by 17,000 to 233,000
- Nvidia stock surged 6%, leading the tech sector rebound
Market Performance
The Dow Jones Industrial Average closed with a gain of 683 points, or 1.8%, while the Nasdaq composite was up 2.9%. The S&P 500 gained 2.3%, its best day since November 2022. This surge came after first-time unemployment claims fell by 17,000 last week to 233,000, according to Labor Department data released Thursday.
Economic Indicators
The better-than-expected jobless claims data provided a small but encouraging sign for the labor market. This helped soothe recession fears that had been sparked by last week’s weaker-than-expected jobs report. The Federal Reserve is widely expected to start cutting rates next month as inflation dropped closer to its 2% goal, clocking in at 3% year over year in June and dropping 0.1%, its first monthly decline since the pandemic.
Sector Highlights
- Technology: Nvidia stock climbed more than 6%, leading the tech sector’s sharp market comeback. Other chip stocks like Advanced Micro Devices (AMD), Broadcom (AVGO), and Intel (INTC) also saw significant gains.
- Pharmaceuticals: Eli Lilly shares soared more than 9% after boosting its annual revenue and profit forecasts on strong weight-loss drug sales.
- Commodities: Gold futures rose more than 1%, sitting solidly above $2,450 per ounce. Silver contracts also jumped more than 1% to trade above $27 per ounce.
Market Sentiment
Despite the positive data, there is concern that the so-called soft landing may be harder than expected. Diane Swonk, chief economist at KPMG, noted that low layoffs alone are not enough to make the Federal Reserve feel good about the state of the economy. However, the demand for workers must not evaporate entirely.
Future Outlook
The Federal Reserve is expected to cut interest rates starting in September, which has already caused long-term bond yields to fall, pushing mortgage rates downward. This has increased prospective homebuyers’ purchasing power and should begin to pique their interest in making a move. Goldman Sachs has revised its forecasts for home price growth this year, expecting prices to rise 4.5% in 2024, up from 4.2% previously.
Conclusion
The stock market’s rebound on Thursday provided a much-needed boost after a tough start to the week. While the latest jobless claims data has helped soothe some of Wall Street’s concerns, the market remains cautious as it navigates through economic uncertainties.
Sources
- Stock market rebounds after tough start to the week, The Hill.
- Stock market today: S&P 500, Nasdaq surge as wild week on Wall Street continues, Yahoo Finance.
- Zoom In Icon, CNBC.
- Nvidia stock surges 6% as chip stocks lead market rebound, Yahoo Finance.
- Stock Market Today: Stocks Rally After Jobs Data Surprises; Six Stocks Dive On Earnings (Live Coverage) | Investor’s Business Daily, Investor’s Business Daily.