Technology companies led a rebound in U.S. equities on Thursday after a report showing applications for state unemployment insurance fell last week to a fresh pandemic low rekindled optimism in the economic recovery.
The Nasdaq 100 Index rallied to a two-week high, with gains in megacaps Apple Inc., Microsoft Corp. and Tesla Corp. powering the advance. Tech stocks rallied the most in the S&P 500, with 10 of the main 11 industry groups climbing. Cisco Systems Inc. fell as its profit forecast missed estimates. European equities rebounded from a two-week low as carmakers and financial-services firms led gains. Cryptocurrencies rose after wild swings in Bitcoin on Wednesday.
The latest jobs report comes after mounting concern that faster inflation will prompt authorities to ease back on stimulus has weighed on risk assets in recent sessions. Minutes from the Federal Reserve’s last meeting showed some officials were open to a debate at “upcoming meetings” on scaling back bond purchases if the U.S. economy continued to progress rapidly.
“While inflation has been the star of the show, keep in mind that the Fed’s mandate is twofold, with employment as the other side,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “The jobless claims read shows once again that that we’re heading in the right direction, but we’re a ways away from where we were pre-pandemic.”
Oil reversed an earlier gain, extending a three-week low after Iran’s president said the broad outline of a deal to end sanctions on its oil had been reached. Yields on 10-year Treasuries fell as the dollar weakened. The Bloomberg Commodity Index fell for a third day.
Here are some key events this week:
Data on existing U.S. home sales for April are due on May 21Euro-area finance ministers and central bank chiefs hold an informal meeting. A larger group of EU finance ministers and central bank chiefs will meet May 22
These are some of the main moves in markets:
The S&P 500 rose 1.2% as of 11:44 a.m. New York timeThe Nasdaq 100 rose 1.9%The Dow Jones Industrial Average rose 0.9%The Stoxx Europe 600 rose 1.3%The MSCI World index rose 1%
The Bloomberg Dollar Spot Index fell 0.4%The euro rose 0.4% to $1.2224The British pound rose 0.5% to $1.4180The Japanese yen rose 0.4% to 108.75 per dollar
The yield on 10-year Treasuries declined four basis points to 1.64%Germany’s 10-year yield was little changed at -0.11%Britain’s 10-year yield declined one basis point to 0.84%
West Texas Intermediate crude fell 0.5% to $63 a barrelGold futures fell 0.2% to $1,878 an ounce