FX.co ★ Pullback By Jobless Claims Contributes To Rally On Wall Street

**Market Surge on Wall Street Following Positive Labor Market Data**

On Thursday, stock markets experienced a significant upward movement, with major indices more than compensating for the previous day's losses. Initially, the indices surged and continued to gain momentum throughout the day.

Towards the end of the trading session, the major averages stabilized near their peak values. The Nasdaq Composite soared by 464.22 points, or 2.9%, reaching 16,660.02. Concurrently, the Nasdaq 100 spiked 119.81 points, or 2.3%, to 5,319.31, and the Dow Jones Industrial Average jumped 683.04 points, or 1.8%, to 39,446.49.

This rally was largely driven by a report from the Labor Department indicating a larger-than-expected decline in first-time unemployment claims for the week ending August 3rd.

The report detailed that initial jobless claims decreased to 233,000—a reduction of 17,000 from the previous week's revised level of 250,000. Economists had predicted a slight decrease to 240,000 from the initially reported 249,000 for the previous week.

This unexpectedly large decline followed a week where jobless claims had peaked at 258,000, the highest since early August 2023. The new data alleviated concerns regarding the labor market's resilience, which had recently contributed to market volatility.

"Initial jobless claims are now the focal point for economists and investors monitoring real-time economic health indicators," stated Nationwide Financial Markets Economist Oren Klachkin. "Our interpretation is that we're headed for a slowdown, not a recession," he noted, though he cautioned that risks remain tilted downward and urged the Federal Reserve to remain vigilant against potential market disruptions.

On the corporate front, Under Armour (UAA) surged by 19.2% following an unexpected fiscal third-quarter profit report. Likewise, Eli Lilly (LLY) experienced a sharp increase after announcing better-than-expected second-quarter results and raising its full-year revenue guidance.

Conversely, Warner Bros. Discovery (WBD) stocks tumbled after the company reported disappointing second-quarter results and declared a $9.1 billion write-down linked to its TV networks.

**Sector Performance**

Networking stocks delivered stellar performances, driving an 8.4% surge in the NYSE Arca Networking Index. Semiconductor stocks also showed considerable strength, as evident from a 6.9% rise in the Philadelphia Semiconductor Index. Lattice Semiconductor (LSCC) saw a notable 13.3% spike after Raymond James upgraded its rating to "Outperform" from "Market Perform."

Pharmaceutical stocks gained significantly on the back of Eli Lilly's positive results, with the NYSE Arca Pharmaceutical Index jumping 3.6%. Additionally, airline, computer hardware, and biotechnology stocks moved notably higher, whereas telecom stocks were among the few sectors that bucked the upward trend.

**Global Market Activity**

In international markets, the Asia-Pacific region generally experienced a downturn on Thursday. Japan’s Nikkei 225 Index declined by 0.7%, while South Korea’s Kospi fell by 0.5%.

European markets showed mixed results; Germany’s DAX Index climbed by 0.4%, but both France’s CAC 40 Index and the UK’s FTSE 100 Index dropped by 0.3%.

**Bond Market Update**

Treasuries extended their recent decline in response to the jobless claims data, leading to a rise in the yield on the benchmark ten-year note by 2.9 basis points, settling at 3.997%.

**Looking Ahead**

With a quiet day expected in terms of U.S. economic data releases, market activity on Friday is likely to be influenced by the latest corporate earnings reports.