The Dow Jones Industrial Average ($DJI) rallied on Thursday morning alongside other major stock indexes following better-than-expected unemployment numbers.
Unemployment Claims Lower Than Expected
According to data from the Labor Department, first-time claims for US unemployment benefits declined by a larger margin than expected in the week ending August 3, 2024.
The report shows that first-time jobless claims dropped by 17,000 to 233,000 from the previous week’s 250,000. This was lower than the analysts’ forecast of 240,000 claims from the 249,000 originally reported the previous week.
The unexpected decline came a week after jobless claims rose to their highest level since reaching 258,000 in the week ending August 5, 2023.
Stock Market Rallies On Jobless Claims Numbers
The Dow Jones Industrial Average rallied 500 points or 1.3%, while the S&P 500 was up 1.4%. The Nasdaq composite also rallied, rising 1.3%. The 10-year treasury yield also felt the impact, rising 4%.
At the start of the week, the stock market fell sharply after the July jobs report sparked fear a recession was looming. Another factor cited for the sharp decline was the unwinding of carry trades after Japan’s central bank raised interest rates.
Eli Lilly Sees Massive Surge After Positive Results
One of Thursday’s biggest gainers was Eli Lilly (LLY), which rose 9.5%. The rise follows the release of its second quarter fiscal 2024 results. It reported a 36% YoY increase in revenue, while EPS rose 68% YoY to $3.28. The growth was driven by Zepbound, its weight-loss drug, which saw revenue exceed $1 billion for the first time.
Upward Trend Weakens
After an initial surge, the trend weakened as concerns over the US economy took over the market. At the closing bell on Wednesday, the Dow was down 0.6%, the S&P 500 went down 0.80%, and the Nasdaq Composite fell 1.1%. As of Friday morning at 9:35 AM EDT, the Dow was down 138.60 points or a 0.35% decline.
In international markets, the Nikkei 225 was up 0.56%, the German DAX index was down 0.21%, while the UK’s FTSE 100 was up 0.19%.
Analysts at Comerica Wealth Management forecast the stock market could strengthen in the next 3 to six months. They forecast that the support level for the S&P 500 is 5000, forecasting that it could end the year around the 5,250 range.
What The Future Holds
According to analysts, the market is not yet clear. Once volatility sets in, it can be a while before things cool down.
Analysts note that the market gained on Thursday does not mean it will be up from here. They note that the second-quarter earnings season is at its tail end. Investors are closely watching results to see if there will be further disappointments.
Should You Invest in the Stock Market Now?
The stock market indexes always rebound on a long-term basis after a period of lows. If you want to invest in the stock market, now would be a good time for potentially huge long-term returns.
You can predict when the downward trend will bottom and get in by conducting a careful analysis. It is also important to watch other key economic indicators such as the upcoming Fed rate announcement, wholesale inventories data from the Commerce Department, and the upcoming Treasury Department’s bond auction.
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
