US stocks gain as jobless claims add to rate cut hopes; Jackson Hole looms

U.S. stocks rose slightly Thursday, extending recent gains as labor market weakness fueled growing conviction that the central bank will cut rates in September.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average  rose 100 points, or 0.3%, S&P 500 gained 18 points, or 0.3%, and NASDAQ Composite climbed 65 points, or 0.4%.  Jobless claims, Fed minutes further rate cut expectations

Data released earlier Thursday showed that the number of Americans filing new applications for unemployment benefits rose rose 4,000 to a seasonally adjusted 232,000 in the latest week, adding to concerns of a cooling of the U.S. labor market.

This followed Wednesday's payrolls revision, as the U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024.

The actual growth was nearly 30% less than the initially reported, with the revision to the total payrolls level being the largest since 2009.

The minutes of the Fed’s late-July meeting, released on Wednesday, also showed an increasing number of policymakers supported lowering interest rates amid progress in bringing down inflation.

Analysts at Citi said they see a 50 bps reduction as their base case for September, especially after Wednesday’s minutes showed more officials leaning towards lower rates. Powell set to speak at Jackson Hole 

Gains in Wall Street were held back by anticipation of an address by Fed Chair Jerome Powell, at the Jackson Hole Symposium on Friday.

Markets widely expect Powell to reiterate the central bank’s dovish stance, setting the stage for a September rate cut, although it remained unclear whether the Fed Chair will explicitly telegraph a September cut. Peloton soars on turnaround momentum 

The quarterly earnings season has seen more results Thursday, even as it draws to a close.

Peloton Interactive (NASDAQ:PTON ) stock soared 18% after the connected fitness company returned to sales growth for the first time in nine quarters as its turnaround plan takes hold.

Snowflake (NYSE:SNOW ) stock fell 9% after the enterprise software maker beat expectations for second-quarter earnings and revenue but offered tepid guidance that failed to assure investors in a competitive market.

Urban Outfitters (NASDAQ:URBN ) stock fell 14% after the retailer’s second-quarter same sales growth came in below expectations, suggesting consumers are feeling the pinch.

Advance Auto Parts (NYSE:AAP ) stock fell 19% after the automotive parts retailer reported disappointing second quarter earnings and slashed its full-year outlook, dashing earlier gains on the back of private equity firm Carlyle Group (NASDAQ:CG ) saying it would buy its Worldpac unit for $1.5 billion in cash.

(Ambar Warrick contributed to this article.)  

 

Source: Investing.com