Wall St climbs after jobless claims data spurs rate-cut bets

May 9, 2024 – 9:03 AM PDT

(Reuters) – The main U.S. stock indexes rose on Thursday as weekly jobless claims data offered fresh evidence of a softening U.S. labor market and renewed hopes that the Federal Reserve will cut interest rates this year.


After a sluggish open, the benchmarks pulled higher in morning trade, with megacap stocks Amazon (AMZN.O), Microsoft (MSFT.O) and Alphabet (GOOGL.O) in the lead.

The number of Americans filing new claims for unemployment benefits increased more than expected to a seasonally adjusted 231,000 last week, data showed. Economists polled by Reuters had forecast 215,000 claims.

“I would consider jobless claims a Fed friendly data, moving in the right direction towards slowing the economy which should help bring down inflation,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Last week’s data showing slowing job growth in April and job openings falling to a three-year low in March had investors pricing in one or two rate cuts by the Fed this year. Prior to that, traders were pricing in just one rate cut.

The focus will shift to next week’s producer and consumer prices readings as well as comments from Fed policymakers for clues on the U.S. rate path. San Francisco Fed President Mary Daly is scheduled to speak later in the day.

At 11:21 a.m. the Dow Jones Industrial Average (.DJI) rose 183.76 points, or 0.47%, to 39,240.15, the S&P 500 (.SPX) gained 18.38 points, or 0.35%, to 5,206.05 and the Nasdaq Composite (.IXIC) gained 44.74 points, or 0.27%, to 16,347.49.

Ten of the 11 major S&P sectors rose, led by a 1.7% rise in the real estate index (.SPLRCR). Data center operator Equinix (EQIX.O) surged 11.3% after its first-quarter results.

On the flip side, chip designer Arm Holdings dipped almost 2% as its full-year revenue forecast came in below expectations. Bigger rival Nvidia (NVDA.O) slipped 0.9%.

Roblox (RBLX.N) slumped 22% after the video-gaming platform cut its annual bookings forecast, in a sign that people were dialing back spending amid an uncertain economic outlook and elevated levels of inflation.

Robinhood Markets (HOOD.O) edged up 0.4% after the online brokerage beat estimates for first-quarter profit, thanks to robust crypto trading volumes and rate hikes that boosted its net interest revenue.

Advancing issues outnumbered decliners by a 2.6-to-1 ratio on the NYSE and a 1.71-to-1 ratio on the Nasdaq.

The S&P 500 posted 26 new 52-week highs and two new lows while the Nasdaq recorded 109 new highs and 57 new lows.

Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Devika Syamnath, Shinjini Ganguli and Sweta Singh

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