The S&P 500 has gained ground, lifted by technology and energy shares, while a rise in weekly jobless claims suggests the labor market is slowing down.
Wall Street’s main indexes have come under pressure in recent days, with the benchmark index shedding 3.6 percent in the past five sessions on expectations of a longer rate-hike cycle and downbeat views on the economy from some top company executives.
However, investors drew some comfort on Thursday after data showed the number of people in the US filing claims for jobless benefits increased moderately last week while unemployment rolls hit a 10-month high towards the end of November.
“More people are filing jobless claims, which shows labor forces are weakening a little bit,” Thomas Hayes, chairman at Great Hill Capital LLC in New York, said.
“It’s just one data point that leads to the Fed cooling down their aggressive hikes, but it doesn’t change December’s 50 basis point (rate hike). The key is going to be the data between December and February as to what they do next .”
The report follows data last Friday that showed US employers hired more workers than expected in November and increased wages, spurring fears that the Fed might stick to its aggressive stance as it attempts to tame decades-high inflation.
The producer price index and the University of Michigan’s consumer sentiment survey on Friday and November’s consumer price data next week will also be in focus ahead of Fed’s policy decision on December 14.
Investors see a 91 percent chance that the US central bank will hike the key benchmark rate by 50 basis points to 4.25-4.50 percent, with the rates peaking in May 2023 at 4.94 percent.
The US central bank has raised its policy rate by 375 basis points this year in the fastest hikes since the 1980s.
This aggressive approach has stoked worries of a recession, with top executives of major US financial institutions including JPMorgan, BlackRock and Citi forecasting a likely economic downturn in 2023.
Adding to the fears, the yield curve between the 2-year and 10-year Treasury notes has also widened in recent days.
In early trading, the Dow Jones Industrial Average was up 241.67 points, or 0.72 per cent, at 33,839.59, the S&P 500 was up 32.12 points, or 0.82 per cent, at 3,966.04, and the Nasdaq Composite was up 130.60 points, or 1.19 per cent, at 11,089.15.
Ten of the 11 major S&P 500 sector indexes rose, led by a 1.5 percent gain in technology stocks.
Energy stocks rose 0.6 percent as oil prices climbed following the easing of anti-COVID-19 measures in China and delays in some tankers carrying Russian oil.
Most mega-cap technology and growth stocks such as Apple Inc, Nvidia Corp and Amazon.com rose between 1.4 percent and 4.2 percent.
Salesforce Inc slipped after Baird downgraded the software firm’s stock to “neutral” while Rent the Runway Inc jumped 33.9 percent after the clothing rental firm raised its 2022 revenue forecast.
Advancing issues outnumbered decliners by a 3.36-to-1 ratio on the NYSE.
Advancing issues outnumbered decliners by a 2.67-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and two new lows while the Nasdaq recorded 53 new highs and 132 new lows.
.