US Stocks Rise as Jobless Claims Data Reduces Fears of Impending Recession
U.S. stocks surged on Thursday, buoyed by encouraging labor data that mitigated concerns of an abrupt deceleration in economic momentum within the world’s largest economy.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average ascended by 268 points, or 0.7%, while the S&P 500 advanced by 54 points, or 1%. Meanwhile, the NASDAQ Composite gained 200 points, marking a 1.2% increase.
Solid Jobless Claims
The latest figures, released earlier on Thursday, revealed that the number of Americans filing new claims for unemployment benefits stood at 233,000 for the week ending August 3. This was below the anticipated 241,000 and a notable decline from the revised 250,000 in the previous week, which had been an 11-month peak.
Wall Street’s major indices have experienced significant declines in recent weeks, with the Nasdaq dipping into correction territory, fueled by mounting fears of a recession. These concerns were triggered by a series of weak indicators in both the labor market and broader business activity.
JPMorgan has increased the probability of a U.S. recession by the end of this year to 35%, up from a previous estimate of 25%, citing diminishing pressures within the labor market.
This adjustment followed a disappointing monthly employment report, which indicated that only 114,000 jobs were added in July.
Market participants will also closely monitor comments from Richmond Fed President Thomas Barkin on Thursday, seeking insights into the U.S. central bank’s potential policy directions.
Earnings Reports in Focus
Thursday also brings a wave of corporate earnings to consider.
Eli Lilly (NYSE) shares surged by 10% after the pharmaceutical giant raised its annual profit outlook, with sales of its popular weight-loss drug, Zepbound, surpassing $1 billion in a single quarter for the first time. On the other hand, Bumble (NASDAQ) shares plummeted by 36% following the online dating platform’s decision to lower its annual revenue growth forecast, raising concerns about its future expansion plans.
Warner Bros Discovery (NASDAQ) shares dropped by 8% after the entertainment conglomerate reported a staggering quarterly net loss of $10 billion. The company also disclosed a $9.1 billion write-down on its traditional television networks, underscoring the rapid erosion of the cable TV model in favor of streaming services.