After witnessing a downside during the early trading on Thursday, the stock market has once again experienced an upward surge. The major markets have notably advanced, compensating for the significant losses incurred in the previous session.
The Dow, after a brief disappointment early in the session, is presently soaring high with an increase of 240.15 points or 0.6% at 38,390.45. The Nasdaq has also elevated by 141.31 points or 0.9% at 15,305.32, alongside the S&P 500 that has risen by 39.92 points or 0.8% at 4,885.57.
The surge in Wall Street is a result of several traders viewing Wednesday's sell-off as a buying opportunity, anticipating that the markets will continue their upward journey as witnessed in the majority of January. Despite the Federal Reserve's signals of an unlikely interest rate cut in March causing a plunge in yesterday's session, economists are persevering in their belief of an eventual lowering of rates.
According to CME Group's FedWatch, there is a modest 38.0% probability of a rate cut in March, but a nearly certain chance that rates will be less by the beginning of May. There may also be a contribution from the continuing decline of treasury yields, with the benchmark ten-year note yield falling to the lowest in over a month.
The U.S. Labor Department has released a report that shows an unexpected slight increase in the first-time claims for U.S. unemployment benefits for the week ending January 27th. There has been a rise in initial jobless claims to 224,000, an increment of 9,000 from the preceding week's revised level of 215,000.
On Friday, the Labor Department is set to release its in-depth report on employment in January. Economists are currently predicting an employment surge by 180,000 jobs in January after a significant increase by 216,000 jobs in December, while the unemployment rate is projected to marginally elevate to 3.8% from 3.7%.
Meanwhile, a report by the Institute for Supply Management has indicated an unexpected surge in U.S. manufacturing activity in January, though it continues to show contraction.
On the sectorally front, Gold stocks are witnessing notable strength today, pushing the NYSE Arca Gold Bugs Index up by 3.1%. Gold stocks are rallying due to the modest increase in the precious metal's price, with gold for April delivery slightly rising $4.40 to $2,071.80 an ounce.
Visible strength also remains among computer hardware stocks, reflecting a 2.0% gain in the NYSE Arca Computer Hardware Index. Furthermore, retail, software, and telecom stocks are also making strong upward moves, while banking stocks continue to witness significant weakness, causing a 1.8% decline in the KBW Bank Index.
In the international sphere, the stock markets across the Asia-Pacific region had another mixed trading session on Thursday. Japan's Nikkei 225 Index declined by 0.8% while Hong Kong's Hang Seng Index increased by 0.5%. In contrast, all the major European markets recorded a downside. The French CAC 40 Index slumped by 0.9%, the German DAX Index fell by 0.3%, and the U.K.'s FTSE 100 Index slightly reduced by 0.1%.
In the bond market, treasuries have significantly retracted from their best day levels, but remain notably higher. The yield on the benchmark ten-year note, which reciprocates its price, is down by 9.0 basis points at 3.877 percent.
