US stocks rose for a fourth straight session on Thursday, led by broad-based gains across all sectors. Investors look to the most important June employment report leave before the opening bell on Friday.
The S&P 500 rallied 1.5% and the Nasdaq 2.3%. The Dow Jones Industrial Average added 246 points, or about 1.1%.
The Department of Labor is ready to release its latest monthly employment data Friday at 8:30 am ET. The numbers are expected to show a payroll gain of 268,000, the lowest since the pandemic-era recovery, according to Bloomberg data. Still, estimates suggest employment growth remained solid despite growing talk of an economic downturn.
Initial unemployment claims unexpectedly increased last week in a potential sign, the labor market may be cooling amid tighter financial conditions. First-time claims for unemployment insurance in the US totaled 235,000 in the week ended July 2, up 4,000 from the previous week’s reading of 231,000 claims, it said on Thursday the Department of Labor. Economists polled by Bloomberg had expected the latest reading to come in at 230,000.
“The data is (finally) moving in the Fed’s direction,” said Jamie Cox, managing partner at Harris Financial Group. “It’s never good to see layoffs, but the pressure on wages may have peaked. A few more weeks of these kinds of numbers and maybe, just maybe, financial conditions are tight enough to allow the Fed to accelerate again the scale of rate increases”.
Elsewhere in the markets, shares of Bed Bath & Beyond (BBBY) increased by 21.7% thereafter news that the interim CEO bought shares and GameStop (GME) rose 14.9% after the video game retailer and meme-stock favorite announced late Wednesday that its board of approved a four-for-one stock split in the form of a dividend.
Tesla (TSLA), Amazon (AMZN), and Shopify (SHOP) also recently announced stock splits, which increase the number of shares in a company to give more investors access to buy without changing the market capitalization.
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Crude (CL=F) climbed back above $102 a barrel after falling below $100 for the first time since mid-May on Tuesday. The benchmark 10-year Treasury yield held steady at 2.9% after falling from its decade-high above 3.4% in mid-June.
Thursday’s early gains follow three days in a row for the S&P 500. In the previous sessionthe benchmark closed up 0.4%, along with slight gains in the Dow and Nasdaq, after a reading of minutes from the Federal Reserve’s June 14-15 meeting said the central bank -American was committed to intervene as necessary to curb inflation.
“Participants agreed that the economic outlook warranted a move to a more restrictive policy stance, and acknowledged the possibility that an even more restrictive stance might be appropriate if high inflationary pressures persist,” the minutes of the meeting said.
Officials also discussed concerns about inflation entrenching itself in the US economy and price stability becoming increasingly difficult to restore.
American flags fly from the NYSE during Independence Day weekend on July 3, 2022 in New York City. (Photo by John Lamparski/Getty Images)
“Many participants felt that a significant risk now facing the Committee was that high inflation could become entrenched if the public began to question the Committee’s decision to adjust the policy stance as warranted,” it said. indicated in the minutes.
At the same time, concerns persist that a further rise in interest rates to control inflation could push the economy into recession, especially as key economic data such as consumer sentiment i expensealong with recent indices of purchasing managers, have shown signs of softening in recent prints. The Atlanta Federal Reserve’s GDPNow model estimates now Real GDP growth in the second quarter of 2022 at -2.1%that would comply with the unofficial threshold for a recession when combined with the 1.6% decline in the first quarter. The official reading on Q2 GDP is July 28.
The Federal Reserve is “nervous that they might raise rates too quickly and start a recession,” said Austan Goolsbee, a professor at the University of Chicago’s Booth School of Business Economics. he told Yahoo Finance Live Wednesday. “That’s the tough balancing act that the Fed has made more difficult because this business cycle doesn’t look anything like a normal business cycle.”
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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