S&P 500 rides tech higher as Treasury yields slip on signs of cooling labor market
Investing.com -- The S&P 500 climbed Thursday as tech resumed its climb higher following a drop in the Treasury yields after data showing jobless claims jumped to 20-month highs stoked expectations for a Federal Reserve pause next week.
The S&P 500 was up 0.6%, the Dow Jones Industrial Average rose 0.5%, or 180 points higher, the Nasdaq rose 0.9%.
Initial Jobless claims unexpectedly rose 28,000 to 261,000, the largest jump since October 2021, pointed to signs of cooling in the labor market.
“We remain of the view that the risk of a full-blown layoff cycle later in the Summer remains substantial as businesses will look to cut costs and recapture more margin,” Jefferies said in a note.
Treasury yields fell on the news as bets on the Fed pause edged higher, underpinned growth sectors of the market including tech and consumer discretionary.
With the expectations of Alphabet (NASDAQ: GOOGL), big tech racked up gains led by Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META) and Microsoft Corporation (NASDAQ: MSFT), with the announcing it will make its ChatGPT-infused AI models available to U.S. government agency.
Adobe Systems Incorporated (NASDAQ: ADBE) rose 4% after launching an enterprise tier for its AI art tool, Firefly, and said it was working with businesses to explore how the tool could help cut costs and boost efficiencies.
The announcement arrived just a week ahead of Adobe’s second-quarter results due Jun.15. The software maker’s Q2 results will be parse for further updates on AI and its planned acquisition of Figma, {{Deutsche Bank said in a note, after hiking its price target on the stock to $500 from $430.
GameStop (NYSE: GME), meanwhile, slid 17% after the video company reported quarterly results that missed estimates and announced it had fired CEO Matthew Furlong and appointed Ryan Cohen as executive chairman.
The shakeup at the top, however, isn’t likely to provide the company with the impetus needed to turnaround performance, Wedbush said in a note Thursday.
“We remain convinced that GameStop is doomed, with declining physical software sales and a shift of sales to subscription services and digital downloads sealing its fate,” Wedbush added after cutting its price target on the stock to $6.20 from $6.30.
Carvana (NYSE: CVNA) jumped 54% afer the online car seller upgraded its second-quarter outlook, forecasting adjusted gross profit per unit to top $6,000, compared with a prior forecasrt of above $5,000.
Tesla (NASDAQ: TSLA) also drove the broader market higher, a day after hitting its highest level of the year, as the EV maker is reportedly in talks with Spanish government officials about building a $4.8 gigafactory in Valencia.
In energy pared some losss as oil prices moved off session lows after the White House denied a Wall Street report suggesting it was close to agreeing an interim nuclear deal with Iran that would allow the latter to resume oil exports.