U.S. stocks rose on Thursday, rebounding from three straight days of losses as technology shares staged a comeback, while the latest jobless claims totaling a fresh pandemic-era low also boosted sentiment.
The Dow Jones Industrial Average rose 300 points. The S&P 500 gained 1.3% and the tech-heavy Nasdaq Composite climbed 1.9% as the so-called FAANG stocks all traded higher.
The number of first-time claims for unemployment benefits for the week ended May 15 came in at 444,000, the lowest since March 14, 2020, the Labor Department reported Thursday. Economist surveyed by Dow Jones had been expecting 452,000 new claims.
“The jobless claims read shows once again that that we’re heading in the right direction,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. “While inflation has been the star of the show, keep in mind that the Feds mandate is two-fold—with employment as the other side.”
Tesla, chip stocks and other speculative parts of the market, which took a big hit in the previous session, bounced back on Thursday amid a recovery in bitcoin prices. The world’s largest cryptocurrency jumped 9% to above $42,000 apiece after dropping suddenly to around $30,000 Wednesday, according to Coin Metrics.
However, bitcoin cut its gains and briefly turned negative on the day at around $38,660 after the Treasury Department said it is taking steps to crack down on cryptocurrency markets and transactions, and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service.
Coinbase shares popped 4% after Wedbush said to buy the crypto-exchange despite the volatility. Tesla rose 3%, while MicroStrategy climbed nearly 7%.
“Crypto, after all, is the poster child for liquidity-induced speculation and the fact that this is now deflating … lends credence to the sense that risk markets are now starting to adjust to the looming prospect of peak-liquidity,” a JPMorgan strategist said in a note.
Despite Thursday’s comeback, the Dow is still down 1% on the week. The average lost about 1% last week as the market rally to highs stalls. The S&P 500 has fallen 0.6% this week, while the Nasdaq is on pace to eke out a small gain for the week.
Shares of Cisco dropped 3% Thursday after the tech conglomerate issued weaker-than-expected earnings guidance for the current quarter.
Oatly shares soared 24% during the company’s public market debut on Nasdaq Thursday.
On Wednesday, investors also digested the Federal Reserve’s minutes from April that hinted at considering tapering its asset purchase programs in upcoming meetings.
“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the Fed minutes said.
— CNBC’s Maggie Fitzgerald contributed reporting.
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