Wall Street advanced on Thursday, led by tech stocks, as investors struggled to position themselves ahead of the release of the closely watched non-farm payrolls report on a public holiday.
The benchmark S&P 500 recovered from an earlier decline to close up 0.4 per cent with tech and utilities tempering falls for energy, basic materials and consumer cyclical industries. The technology-heavy Nasdaq Composite, which is up more than 15 per cent year to date, added 0.8 per cent. Both indices had declined in the previous session. The KBW bank index rose 1.1 per cent.
The moves come as traders turn their attention from the state of the banking sector to the health of the US labour market, with investors interpreting slowing demand for jobs as a sign of cooling economic activity.
“The economy was on track to fall into recession soon even before the impact of the banking turmoil feeds through,” said Andrew Hunter, deputy chief economist at Capital Economics. “There also appears to be a lower but rising chance that a recession has already begun.”
Data from the Department of Labor showed there were 228,000 new applications for unemployment aid in the week to April 1, more than the 200,000 expected by economists. The official jobs report out on Friday, when markets are closed, is expected to show that the US added 233,000 jobs in March, slower than the 311,000 jobs it created in February.
That would follow other economic indicators this week that suggest the US economy and labour market are losing momentum. On Wednesday, a report from payroll processor ADP showed private businesses in the US created 145,000 jobs in March, below forecasts of 200,000, while a separate report from the Institute for Supply Management showed activity in the vast services sector also cooled last month. The day before, US Bureau of Labor Statistics data showed job openings fell sharply from 10.6mn in January to 9.9mn in February, the lowest monthly figure since May 2021.
A rally in US government debt on Wednesday — fuelled by investors’ bets that the Federal Reserve’s aggressive monetary tightening campaign was nearing an end — that pushed Treasury yields to their lowest level in seven months was unwound on Thursday. The yield on the interest rate-sensitive two-year Treasuries climbed 0.07 percentage points to 3.83 per cent as prices fell.
The dollar was steady against a basket of six other major currencies, having shed more than 2 per cent last month. Spot prices for gold — which are close to a 12-month high — fell 0.7 per cent to $2,007 an ounce.
Brent crude, the international benchmark, slipped 0.1 per cent to $84.87 after jumping on Monday following Opec+ members’ decision to cut production by more than 1mn barrels a day.
Europe’s region-wide Stoxx 600 added 0.5 per cent and Germany’s Dax rose 0.5 per cent as industrial production in the eurozone’s biggest economy advanced 2 per cent month on month in February. This followed a revised 3.7 per cent jump in January — well above the 0.1 per cent increase forecast by economists. London’s FTSE 100 gained 1 per cent.
In Asia, Hong Kong’s Hang Seng index closed 0.3 per cent higher, China’s CSI 300 fell 0.1 per cent and Japan’s Topix lost 0.9 per cent.
