U.S. stocks marched upward Thursday, with tech stocks leading the Nasdaq higher than other indexes, after fresh data pointed to a gradual softening of labor market conditions ahead of the highly anticipated Friday jobs report.
The S&P 500 (^GSPC) added 0.4%, while the Dow Jones Industrial Average (^DJI) hovered just above the flatline. The technology-heavy Nasdaq Composite (^IXIC) gained 0.8%.
The stock and bond markets will both close for Good Friday on April 7.
Government bonds yields were higher. The yield on the 10-year note was up slightly, while rate-sensitive two-year note yields climbed to 3.82% Thursday.
On the commodities front, gold futures (GC=F) are shining right now after the metal managed to break the $2,000-per-ounce barrier on the back of weak US economic data, as well as hopes that the Fed will raise rates more slowly.
Crude oil (CL=F) continues to hover around $80 a barrel, little changed after big gains to start the week. At the same time, gas prices nationwide have notched up to a five-month high, surpassing $3.50 per gallon, according to data from AAA. The jump comes as the OPEC+ coalition, in a surprise decision last weekend, decided to cut oil production.
Meanwhile, applications for US unemployment benefits rose by 228,000 for the week ended April 1, the Labor Department data reported, higher than consensus estimates of 200,000. The prior week was revised up to 246,000 given the government’s updated seasonal factors. Continuing claims were also revised up for the week ending March 18 from 1.689 million to 1.823 million.
This comes after a report Wednesday from the private payroll firm ADP showed that employers added 145,000 jobs in March as the labor market showed signs of slowing from its strong pace so far this year.
That figure was well below the consensus estimates of 210,000 and lower than the revised 261,000 jobs gained in February. But market strategists say it’s unclear if ADP’s results foreshadow a softer nonfarm payrolls report Friday, where Wall Street’s attention now turns.
Economists surveyed by Bloomberg expect Friday’s jobs report to show 240,000 jobs created last month. This would be significantly lower than the average job gains of 343,000 over the last six months.
In additional jobs data earlier this week, the government’s Job Openings and Labor Turnover Survey (JOLTS) found that openings receded more than expected to 9.931 million, marking the first time the number dropped below 10 million since May 2021.
The gradual slowing in the labor market may be encouraging for policymakers. Some investors are maintaining “a fairly dovish path” from the Fed over the coming months.
“For instance, at the next meeting in May, the chances of a rate hike according to futures remained at 47%, after having been as high as 70% earlier in the week,” Jim Reid and colleagues at Deutsche Bank wrote in note to clients.
Meanwhile, Cleveland Fed President Loretta Mester said on Wednesday she predicts rates will need to move higher.
“Precisely how much higher the federal funds rate will need to go from here and for how long policy will need to remain restrictive will depend on how much inflation and inflation expectations are moving down,” Mester said in a speech at the Money Marketeers of New York University.
Markets on Thursday seemed to welcome the comments from St. Louis Federal Reserve President James Bullard, who cooled fears that the recent bank failures will send the economy into a recession.
Separately, the International Monetary Fund Managing Director Kristalina Georgieva said Thursday that the global economy will grow less 3% this year, the lowest medium-term growth forecast since 1990.
In single-stock moves:
- Costco Wholesale Corporation (COST) shares slid after the retailer reported softer-than-expected March sales amid a slowdown in discretionary spending from consumers.
- Shares of Palantir Technologies Inc. (PLTR) moved upward after the company expanded its cloud computing partnership with Microsoft to government agencies.
- CrowdStrike Holdings, Inc. (CRWD) shares rose Thursday following an investor day on Tuesday during which hinted at coming up short on medium-term growth and profit outlook.
- Shares of AMC Entertainment Holdings, Inc. (AMC) surged after Delaware’s Court of Chancery ruled against a share conversion settlement.
- Constellation Brands (STZ) shares gained after the company reported results that beat analyst expectations and increased its quarterly dividend.
- Shares of Levi’s (LEVI) plunged 16% after the retailer reported a drop in quarterly profit. The company maintained full year guidance.
- Airbnb (ABNB) shares were on the downswing Thursday after a publication reported that top professional hosts are building out their own booking platforms and offering discounts to cut out Airbnb.
- Shares of Alphabet Inc. (GOOG) and (GOOGL) rose as Alphabet CEO Sundar Pichai remains bullish that Google’s search engine can hold its ground against a ChatGPT-led AI onslaught. The company giant plans to add chat functionality to Google Search, according to the Wall Street Journal.
Elsewhere on the earnings front, WD-40 (WDFC), Lamb Weston (LW), and RPM (RPM) are also set to report on Thursday.