Nasdaq and S&P 500 Rise 2% in Rally Following US Jobless Data
U.S. stocks experienced a notable rally on Thursday, with the Nasdaq and S&P 500 indices each climbing over 2% following a positive jobs report. The surge in stock prices was driven by better-than-expected data on jobless claims, which alleviated concerns about a rapidly weakening labor market.
The number of new unemployment claims fell more than anticipated in the latest week, providing a boost to investor sentiment. This drop in claims was seen as a crucial data point for the week, highlighting the resilience of the labor market amid broader economic uncertainties. Paul Nolte, a senior wealth advisor and market strategist at Murphy & Sylvest, noted the importance of this data, suggesting that fears of an imminent recession might be overstated. He commented, “Our reading on this is the labor market continues to be OK… The recession fears at this point are probably a little overblown.”
The rally was broad-based, with all major sectors of the S&P 500 advancing. Technology and communication services sectors led the charge, reflecting optimism about growth prospects in these areas. Small-cap stocks also enjoyed strong gains, with the Russell 2000 index rising by 2.4%. The Dow Jones Industrial Average saw a substantial increase, climbing 683.04 points, or 1.76%, to close at 39,446.49. The S&P 500 surged 119.81 points, or 2.30%, to finish at 5,319.31, while the Nasdaq Composite added 464.22 points, or 2.87%, reaching 16,660.02.
Among individual stocks, Eli Lilly stood out with a 9.5% jump in its share price. The pharmaceutical giant raised its annual profit forecast following impressive sales of its weight-loss drug Zepbound, which surpassed $1 billion for the first time in a quarter. Similarly, shares of Under Armour soared by 19.2% after the company reported a surprise profit for the first quarter, driven by successful inventory and promotion management strategies.
Despite the positive market movement, volatility remained a concern. The Cboe Volatility Index, often referred to as Wall Street’s fear gauge, showed a decline, but market experts cautioned that volatility could persist. David Lundgren, chief market strategist and portfolio manager at Little Harbor Advisors, observed, “Once volatility gets going, it takes a while for it to calm down.” He added that while the recent gains were significant, it did not necessarily indicate a sustained upward trend, though there was a high likelihood of above-average returns in the coming months.
As the second-quarter earnings season nears its end, investors are closely scrutinizing final results, particularly after a series of disappointing reports earlier in the period. Trading volume on U.S. exchanges totaled 11.98 billion shares, slightly below the 12.60 billion average over the last 20 trading days. Advancing issues outpaced declining ones on both the NYSE and Nasdaq, with a 3.59-to-1 ratio and a 2.76-to-1 ratio, respectively, favoring gainers. The S&P 500 recorded 7 new 52-week highs and 4 new lows, while the Nasdaq Composite saw 32 new highs and 183 new lows.
Overall, Thursday’s market performance highlighted a renewed investor confidence buoyed by encouraging labor market data, although caution regarding future volatility remains.
