NEW YORK — U.S. stocks rallied on Thursday in the latest sharp shift on Wall Street after a better-than-expected unemployment report eased concerns about a slowing economy.
ThatandThe P 500 gained 2.3%, its best day since 2022, paring down to 0.5% of its loss from a brutal start to the week. The Dow Jones Industrial Average rose 683 points, or 1.8%, and the Nasdaq Composite climbed 2.9%, with Nvidia and other big tech stocks leading the way.
US Treasury yields also rose in the bond market, a sign that investors are less worried about the economy after a report showed that fewer US workers filed for unemployment benefits last week, a figure better than economists had expected.
Exactly a week ago, worse-than-expected unemployment data fueled concerns that the Federal Reserve had kept interest rates too high for too long to fight inflation, slowing the economy. That sent markets reeling, as did a rate hike by the Bank of Japan that sent shockwaves around the world and disrupted a popular trade for some hedge funds.
In the worst case, at least so far, the SandThe P500 was nearly 10% below its all-time high last month. Such declines are common on Wall Street, and 10% “corrections” occur roughly every one to two years. After Thursday’s jump, the index is back about 6% below its record.
What made this decline particularly scary was how quickly it happened, a measure of how much investors are paying to protect themselves from future price declines.andThe P 500 briefly rose to its highest level since the COVID crash in 2020.
Still, according to strategists at BNP Paribas, the market fluctuations resemble a “positioning-related crash” caused by too many investors entering and then exiting similar trades together, rather than the start of a long-term downmarket following a recession.
They say the crisis is more similar to the “flash crash” of 2010 than the global financial crisis of 2008 or the pandemic-induced recession of 2020.
Of course, despite all long-term forecasts, there were rapid market changes last week.
“Today’s unemployment data may ease some of the concerns raised by last week’s weak jobs report,” said Chris Larkin, managing director of trading and investing at Morgan Stanley’s E-Trade. “But with inflation data due next week and the stock market still enduring its biggest decline of the year, it’s unclear how much this will affect sentiment.”
Meanwhile, major US companies continue to present earnings reports for the spring, most of which are better than analysts expected.
Eli Lilly rose 9.5 percent, leading the market after the company reported higher earnings and revenue than Wall Street expected. Sales of diabetes drug Mounjaro and weight-loss drug Zepbound are booming, and the company raised its financial forecast for the year.
Shares of major technology companies also rose, reversing some of their heavy losses from last month.
After a handful of them almost single-handedly conquered the SandAlthough the group known as the “Magnificent Seven” rose from the P500 to dozens of all-time highs this year, they lost momentum last month as their share price rose too high amid investor enthusiasm surrounding artificial intelligence.
The development of these handful of stocks has additional implications for the SandP 500 and other indexes because they are by far the most valuable companies in the market. Nvidia, which has become the poster child of AI trading, rose 6.1%, cutting its loss for the week so far to 2.1%. It was the strongest single force of the day, pushing the SandP500.
Increases of 1.7 percent at Apple and 4.2 percent at Meta Platforms were also major growth drivers alongside Eli Lilly.
They helped offset an 11.3 percent decline at McKesson, which beat analysts’ earnings expectations last quarter but fell short of expectations on revenue. The company said growth in its medical-surgical business had slowed.
Bumble, the Texas-based dating app, lost more than a quarter of its value, or 29.2%, after its third-quarter revenue forecast fell well short of Wall Street’s.
All in all, the SandThe P500 gained 119.81 points to 5,319.31. The Dow gained 683.04 to 39,446.49 and the Nasdaq Composite rose 464.22 to 16,660.02.
In the bond market, the yield on 10-year Treasuries rose to 3.99% from 3.95% late Wednesday.
On overseas stock markets in Asia and Europe, indices showed mixed results. In Japan, where some of the wildest moves in global markets took place, the Nikkei 225 fell 0.7 percent, looking like a small wave after the sharp swings of 12.4 percent down and 10.2 percent up at the start of the week.
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AP business writers Yuri Kageyama and Matt Ott contributed.
