US stocks experienced a significant boost on Thursday as weekly initial jobless claims fell more than forecasted, providing a reassuring update on the health of the US labor market. The S&P 500, Nasdaq, and Dow Jones Industrial Average all saw gains of around 1.3%, indicating a positive shift in market sentiment.
The jobless claim update, which is typically routine, took center stage amid growing scrutiny on the labor market. Last week’s lackluster non-farm payrolls report had sparked concerns and served as one of the initial triggers for recent market declines. Therefore, the better-than-expected jobless claims data provided a much-needed confidence boost for investors.
According to government data, there were 233,000 initial jobless claims in the week ending August 3, down from 250,000 the previous week and below economists‘ forecasts. This lower number helped fuel Thursday’s trading session, which saw a comeback attempt after a turbulent period of market volatility.
In terms of individual stock movements, Nvidia, a prominent player in the AI industry, was in focus after experiencing a back-and-forth day that ultimately led to a 5% decline in its stock price. On the other hand, pharmaceutical company Eli Lilly saw its shares soar over 10% following an earnings report that included boosted revenue and profit forecasts due to strong sales of its weight-loss drug.
As the trading day progressed, the S&P 500 and Nasdaq continued to rise to session highs, each gaining roughly 1.6% by mid-morning. The Dow Jones Industrial Average also saw a solid increase of around 1.3%. This positive momentum was fueled by the initial jobless claims data, which helped alleviate concerns about the state of the US economy.
Overall, the market reaction to the jobless claims report was largely positive, with investors interpreting the data as a sign that the labor market may not be as dire as previously feared. Tech stocks, which have been leading the recent market declines, were closely watched, with Nvidia opening higher after its previous day’s losses.
In conclusion, the better-than-expected jobless claims data provided a much-needed boost to US stocks on Thursday, easing some fears about the state of the labor market and the broader economy. The market’s positive reaction to the report suggests that investors are cautiously optimistic about the future trajectory of the US economy.