U.S. stocks rallied Thursday after a fresh read on jobless claims eased investor concerns about a looming recession and fueled what’s been a wild week for financial markets.
The Nasdaq Composite, which recently fell into correction territory, rose nearly 3% helped by Nvidia, Intel and Palantir shares. The tech-heavy index is still below its all-time high of 18,647 reached in July.
The S&P 500, the broadest measure of the stock market, is on pace for its best session since February. Technology, consumer discretionary and industrials led the gains while consumer staples and utilities, the more defensive plays, rose the least.
And the Dow Jones Industrial Average, which fell a dramatic 1,033 points Monday, clawed back by rising over 600 points heading into the final hour of trading.
All of the Dow 30 members were higher led by Intel, Salesforce and Caterpillar, while Disney and Walgreens rose the least.
INSIDE THE MOST RECENT JOBLESS CLAIMS DATA
Less Americans filed for weekly jobless benefits, falling from a one-year high, giving investors a piece of relief that the job market remains steady. A surprise pop in claims a week ago, combined with a softer July jobs report, with just 114,000 positions added and an uptick in unemployment to 4.3%, sparked concerns of a bubbling recession.
It also triggered the so-called ‘Sahm Ruhle’, this is when the 3-month moving average of the unemployment rate is a 0.5% below the 12-month low, an accurate recession predictor.
Speaking to FOX Business Sahm, who is the chief economist at New Century Advisors, cautioned investors to take in more data before jumping the gun.
"A recession is a broad-based contraction economic activity, so I think we need to see more signs of it. I don’t think we need to see more signs to have say policy makers act, like the Federal Reserve. In terms of really saying this is a recession, we are not there. Frankly, if the labor market data continues to worsen, that is a very negative sign" she said during a Wednesday appearance on ‘Making Money with Charles Payne.’
Every job data point between now and the Federal Reserve’s September meeting will be under the microscope. Over 50% of market watchers are predicting that policymakers will kick in a bigger rate cut, likely as much as 50 basis points, according to the CME’s FedWatch Tool, which tracks the probability of rate moves.
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As stocks rebound, bond yields rose with the 10-year Treasury returning to 4%. Cryptocurrencies also marched higher with Bitcoin nearing $60,000 after falling as low as $50,000 amid this week’s volatility.
