Stock Market Today: Dow logs best day in 3 weeks as labor-market data calm recession fears (2024)

Thursday's Top Reads

All three major stock indexes closed higher on Thursday for the second time in the past three sessions, fueled by weekly jobless claims that gave investors hope the U.S. labor market can continue to hold up.

Thursday's data was "soothing concerns over a U.S. economic recession,'' according to senior markets economist James Reilly at Capital Economics.

Expectations for Federal Reserve interest-rate cuts have heated back up after a patch of extreme volatility that shook markets and stoked recession fears.

As the dust has begun to settle, another worry has been emerging: Investors positioning for the Fed to take an ax to interest rates could be setting markets up for another trap.

“I don’t think they want to be seen as the ‘hot gun.’ That’s not what the Fed wants to do,” Diane Jaffee, a senior portfolio manager at TCW, told MarketWatch on Thursday.

While the so-called Trump trade has moved to the back burner as investors focus on recession fears, the Japanese yen carry trade and a spike in volatility, the relationship between the stock market's performance and former President Donald Trump's prospects of winning the November election continues to run strong, analysts at Bespoke Investment Group said in a Thursday note.

Pointing to the chart above, which tracks the probability of a Republican victory based on betting markets against the performance of the S&P 500-tracking SPDR S&P 500 ETF Trust, they wrote: "GOP odds to win the Presidency made its most recent low back on April 19th, and that was the same day that SPY bottomed. From there, the two traded higher all the way until July 16th, when both hit their 2024 peaks. Since then, the two have been trending lower, and as mentioned earlier, yesterday the GOP's odds to win dipped back below 50%."

Market watchers have been tracking the relationship for months. Some have argued the correlation largely reflects investors' desire for certainty — in this case, a clear outcome in November.

All three major stock indexes headed into Thursday's final hour of trading on track to finish higher for only the second time in the past six sessions, supported by fresh investor optimism about the strength of the U.S. labor market.

Zillow's stock flew 20.2% higher toward its first gain in seven sessions after strong Q2 results, as residential, rental and mortgage revenue all beat expectations and the real estate market.

The stock was on track to have its best day since it soared 22.5% on April 6, 2020.

Analyst Daniel Kurnos at Benchmark raised his stock price target to $65 from $60, and recommends "buying now before the housing market recovers."

Keep in mind that mortgage rates have have just seen the biggest drop in eight months, to help make buying a house a little more affordable.

The company, which reported late Wednesday, also beat expectations for profit, total revenue and total visits to its sites.

"Zillow outperformed the residential real estate industry for the eighth consecutive quarter, delivering better-than-expected revenue across the business," said new Chief Executive Jeremy Wacksman.

One area in particular that Zillow beat the industry, Zillow's mortgage revenue rose 42% from a year ago amid a 125% jump in purchase loan origination, while Zillow's estimate of total industry purchase loan origination volume was a decline in the "mid-single digits" percentage range.

Chip stocks are climbing Thursday, with all members of the PHLX Semiconductor Index in solidly positive territory on the day.

The index on the whole is up 6.4% in afternoon action, with all components up at least 4%. Shares of Lattice Semiconductor and Wolfspeed are leading the pack, up about 13% and 12%, respectively.

Through Wednesday's close, the index was down about 25% from its July highs. "We believe the selloff in semi stocks is due to macro factors combined with high expectations and disappointing results," Citi analyst Christopher Danely said in a note to clients.

But he cheered a buying opportunity ahead of the open, saying that "the main reasons we are positive — AI and memory strength — remain intact."

The S&P 500 was on track for its biggest one-day jump since January 2023 on Thursday as Wall Street bounced back from its biggest selloff in more than two years earlier this week.

The large-cap index was up 117 points, or 2.3%, in recent trade at 5,316, on track for its best day since Jan. 6, 2023, Dow Jones Market Data showed. Meanwhile the Nasdaq Composite had gained 466 points, or 2.9%, at 16,658 in recent trade.

Even small-cap stocks, which have been among the worst-hit corners of the market this week, were rising as the Russell 2000 rose 41 points, or 2%, at 2,076.

The Dow Jones Industrial Average, meanwhile, was up 646 points, or 1.7%, at 39,411. The Dow was on track for its biggest gain on a percentage-point basis since July 16, while the Nasdaq was on track for its biggest jump since February, FactSet data showed.

Major cryptocurrencies rose on Thursday, with XRP leading the gains after a federal judge in New York delivered a ruling in the case involving Ripple Labs and the U.S. Securities and Exchange Commission — a decision that was considered favorable for Ripple.

Bitcoin rose 6% on Thursday to around $59,520, according to CoinDesk data. The largest cryptocurrency by market capitalization is still 19% below its all-time high of $73,798 reached in March. XRP rose 22.7% on Thursday to around $0.62.

Judge Analisa Torres on Wednesday ordered Ripple Labs to pay the SEC about $125 million in penalties over the violation of federal securities laws through its institutional sales of XRP. Torres reiterated her view that XRP was not a security when sold on digital-asset exchanges to the general public, but was so when sold to institutions.

The SEC had been seeking fines and penalties totaling $2 billion in its case against Ripple.

Thursday's $25 billion sale of 30-year Treasury bonds tailed by about 3 basis points in a sign of weak demand, with direct and in-direct bidders taking below-average shares.

Direct bidders took 15.5% and indirect bidders grabbed about 65%, forcing dealers to step in more than usual, said Tom di Galoma, head of fixed-income trading for New Jersey-based Curvature Securities LLC. Thursday's auction came a day after weak demand was also seen at the Treasury's $42 billion sale of 10-year notes, stoking investor jitters.

Treasury yields remained mostly higher immediately after Thursday's auction results came in, with the 30-year rate at almost 4.3%, according to FactSet data.

Robinhood gained popularity for its beginner-friendly investing app and zero-commission trading. But in its Wednesday earnings call, the company talked about steps it was taking to cater its business more towards advanced traders.

Shares of Robinhood opened about 3% higher on Thursday morning, following its Q2 earnings beat.

Robinhood hinted at plans to roll out futures trading as well as a revamped desktop app. Both of these features are geared towards investors with more experience.

The company is also hosting its "Hood Summit" conference in October, and inviting some of its most active customers to test out new products.

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