On Thursday, stocks had a strong start but eventually pulled back, with the Dow Jones even briefly falling below its opening mark. However, by the end of trading, all major indices remained in the green. The Dow gained 27.73 points (0.1%) closing at 38,178.03, whereas the Nasdaq rose by 56.16 points (0.4%) finishing at 15,220.17, and the S&P 500 increased 13.45 points (0.3%) settling at 4,859.10.
This fluctuation may have been due to some traders viewing Wednesday's decline as a purchase opportunity, amid the general upward market trend seen throughout most of January. Despite the Federal Reserve hinting at an unlikely interest rate cut in March, which had largely factored into Wednesday's market stumble, economists maintain that a rate reduction is more a question of 'when' rather than 'if'.
Presently, CME Group’s FedWatch Tool suggests a 44.5% chance of a March rate decrease, but almost certainty for a cut by early May. The lower treasury yields could have also influenced the market's early rise, as the benchmark ten-year note fell to its lowest in over a month.
Traders seemed unsure about making substantial moves ahead of Friday's anticipated the monthly jobs report by the Labor Department. Economists estimate a rise in employment by 180,000 jobs in January after an increase of 216,000 jobs in December. The unemployment rate is predicted to increase slightly from 3.7% to 3.8%.
Furthermore, a report by the Institute for Supply Management indicated an unexpected increase in U.S. manufacturing activity. This development might have sparked worries that economic strength could delay future rate cuts by the Fed.
The Gold sector witnessed significant gains, driving the NYSE Arca Gold Bugs Index up by 3.1%. The rise in gold stocks was due to an increase in the price of the precious metal, with gold for April delivery going up by $10.20 to $2,077.50. Considerable gains were also seen among computer hardware stocks, with the NYSE Arca Computer Hardware Index gaining 1.4%.
On the other hand, banking stocks experienced continuous sell-offs from late in the previous session, which pulled the KBW Bank Index down by 3.2%.
In global markets, Asia-Pacific stock performances were mixed on Thursday. Japan's Nikkei 225 Index dropped by 0.8%, while Hong Kong's Hang Seng Index increased by 0.5%. On the other hand, major European markets experienced downfalls, with the French CAC 40 Index falling by 1%, the German DAX Index by 0.4%, and the UK's FTSE 100 Index by 0.3%.
In the bond market, treasuries saw a sharp rise, following a recent upward trend. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, fell by 13.4 basis points, closing at 3.833%.
