Stocks rallied Thursday, clawing back some of their losses from the previous session, as falling jobless claims added to confidence in the U.S. economic recovery.
Shares that have the most to gain from a rebounding economy, including chip and materials stocks, led the gains.
The Dow Jones Industrial Average rebounded by about 270 points, or 0.8%. The S&P 500 added 1%. The Nasdaq Composite rose 1.3%.
Stocks have seesawed this week, alternating between up and down days. The three major averages are on track to close the week marginally higher.
“There has been so much volatility over the past week or so,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said. “We’re seeing a combination of some good economic news, some people going in and picking up names. That’s why we see a little bit of a bounce here.”
A drop in jobless claims to the lowest in decades gave some investors confidence the U.S. economy could keep growing through headwinds such as the Russia-Ukraine war and higher interest rates. Initial jobless claims last week totaled 187,000, the lowest level since 1969, the Labor Department reported Thursday.
Thursday’s rally gained steam as the day went on with technology and materials stocks leading the way.
Chip stocks climbed Thursday, with shares such as Nvidia among the favorites of traders to buy in market upswings. These chip companies also stand to benefit in a continuing global economic recovery from the pandemic. Nvidia jumped more than 8%, Intel added 4.7% and AMD rose 4.5%.
Materials was the second-best-performing S&P 500 sector Thursday. Nucor added more than 3% and Freeport-McMoRan rose more than 2%.
Uber gained more than 4% after the company announced a deal to list all New York City taxis on its app.
Meanwhile, bitcoin rose 4% in another sign of rising risk appetite.
Investors are continuing to monitor the war in Ukraine and weigh the Federal Reserve’s rate hikes amid persistent inflation.
Last week, the Fed raised interest rates for the first time since 2018. Chair Jerome Powell on Monday vowed to be tough on inflation and opened the door for more aggressive half-percentage-point rate hikes.
NATO leaders met in Brussels Thursday to discuss increasing pressure on Russia, as Ukraine appears to be retaking ground in the war.
“While the stock market is attempting to recover from its correction, markets are fundamentally riskier and more uncertain than before Russia’s invasion of Ukraine,” said Richard Saperstein, chief investment officer at Treasury Partners.
The S&P 500 fell into correction territory late February, but is now less than 7% off its highs. The Dow is also around 6% from its intraday record, and the Nasdaq Composite is off by around 13%.
The indexes are coming off a big rally last week, their best weekly performance since 2020.
All three major averages are on track to close the month at least 2% higher.