Following a turbulent start to the session, stocks have largely risen throughout the trading day on Thursday. The key stock indexes have made a substantial gain, bouncing profoundly into the green after vacillating around the break-even line during the earlier trading activity.
As we draw closer to the end of the session, the major averages are slightly shy of their morning highs. The Dow Jones is up by 241.56 points or 0.6% at 38,144.85, while the Nasdaq has risen by 180.30 points or 1.2% to 15,785.78. The S&P 500 has also increased by 33.68 points or 0.7%, surging to 5,052.07.
This uptick on Wall Street appears to be a result of traders breathing a sigh of relief after the Federal Reserve's monetary policy announcement made on Wednesday. Traders, recently concerned that the Fed's next move could be an interest rate hike instead of a cut, seem to have had their worries eased by Jerome Powell, the Fed Chair.
According to Chris Zaccarelli, Chief Investment Officer for the Independent Advisor Alliance, Powell went beyond refraining from a hawkish press conference; he deliberately adopted a dovish stance. He took an optimistic view of data - from the unexpected inflation rise to the recent dip in economic growth expectations - and dismissed any suggestions of a shift from rate cuts to rate hikes by the Fed. Zaccarelli added, "He stated plainly that he believes their next shift will be a cut."
Earlier in the day, stocks experienced considerable volatility as traders responded to the most recent batch of U.S. economic data, which featured a report from the Labor Department indicating a dramatic first-quarter surge in labor costs for 2024.
The report showed that unit labor costs escalated by 4.7% in the first quarter, following a revised stable reading from the fourth quarter. Economists had anticipated a labor cost increase of only 3.2% compared to the 0.4% boost reported for the prior quarter.
This robust rise in unit labor costs is another in a series of recent data points showing that inflation pressures remain high, according to Oren Klachkin, an economist at Nationwide Financial Markets.
Additionally, the Labor Department disclosed that initial jobless claims remained unchanged last week, whilst a report from the Commerce Department showed that the U.S. trade deficit diminished slightly in March.
In sector news, transportation stocks experienced a sharp rise throughout the session, prompting the Dow Jones Transportation Average to increase by 2.6%.
Avis Budget (CAR) and C.H. Robinson Worldwide (CHRW) witnessed a substantial surge in their daily results. Retail stocks also showed considerable strength, with the Dow Jones U.S. Retail Index up by 1.8%.
In contrast, overseas stock markets showed a mixed performance on Thursday. The Hong Kong Hang Seng Index rose by 2.5%, while Japan's Nikkei 225 Index fell marginally by 0.1%, and South Korea's Kospi dropped by 0.3%.
Major European markets also had mixed results. The U.K.'s FTSE 100 Index rose by 0.6%, while the German DAX Index declined by 0.2% and the French CAC 40 Index dropped by 0.9%.
In the bond market, treasuries have risen moderately during the session after some initial instability. As a result, the yield on the key ten-year note, which shifts inversely to its price, is down by 1.2 basis points at 4.583%.