Wall Street Sees Its Best Day Since 2022 as Unemployment Data Boosts Market; S&P 500 Rises 2.3%

NEW YORK (AP) — U.S. stocks surged on Thursday following a better-than-expected unemployment report, which alleviated some concerns about the slowing economy.

The S&P 500 gained 2.3%, marking its best performance since 2022 and reducing its earlier losses to just 0.5% from a rough start to the week. The Dow Jones Industrial Average climbed 683 points, or 1.8%, while the Nasdaq Composite rose 2.9%, bolstered by strong performances from tech giants like Nvidia.

Treasury yields also increased, reflecting a decrease in investor anxiety about the economy. The positive jobless claims data, which showed fewer workers applying for unemployment benefits than anticipated, helped boost market sentiment.

Last week, disappointing unemployment claims data had intensified concerns that the Federal Reserve’s high interest rates were overly restrictive, causing a market downturn. This was compounded by a rate hike by the Bank of Japan, which disrupted global financial markets and affected hedge fund strategies.

At its lowest point this week, the S&P 500 had fallen nearly 10% from its recent peak. While such declines are not uncommon, the speed of this drop was notable. Following Thursday’s rebound, the index is now about 6% below its record high.

This recent volatility is more akin to a “positioning-driven” market adjustment rather than the onset of a prolonged downturn, according to strategists at BNP Paribas. They liken the situation to the 2010 “flash crash” rather than the 2008 financial crisis or the 2020 pandemic-related recession.

Despite the recent fluctuations, major U.S. companies are reporting strong earnings. Eli Lilly saw a significant 9.5% increase in its stock price after posting better-than-expected profit and revenue, driven by strong sales of its Mounjaro diabetes treatment and Zepbound weight-loss drug. The company also raised its annual financial forecast.

Tech stocks, particularly those in the “Magnificent Seven,” are recovering some of their recent losses. Nvidia, a leader in AI technology, rose 6.1% on Thursday, helping to drive the S&P 500 upward. Apple and Meta Platforms also contributed to the gains with increases of 1.7% and 4.2%, respectively.

Conversely, McKesson’s stock fell 11.3% despite exceeding profit expectations, due to slower revenue growth in its medical-surgical business. Bumble’s shares dropped 29.2% after its revenue forecast for the third quarter fell short of Wall Street’s expectations.

The S&P 500 closed up 119.81 points at 5,319.31, the Dow added 683.04 points to reach 39,446.49, and the Nasdaq Composite rose 464.22 points to 16,660.02. In the bond market, the yield on the 10-year Treasury note increased to 3.99% from 3.95% late Wednesday.

International markets showed mixed results, with Asia and Europe experiencing varied movements. In Japan, the Nikkei 225 index fell 0.7% amid ongoing volatility.