Technology stocks drove a rally in US equities while bond yields and the dollar fell after data showing US jobless claims surged more than expected last week.
(Bloomberg) — Technology stocks drove a rally in US equities while bond yields and the dollar fell after data showing US jobless claims surged more than expected last week.
The jump in jobless claims to the highest since October 2021 shows that the labor market, while largely resilient, is starting to show signs of cooling. That delivered a boost to the tech sector, which has been flagging under speculation the Federal Reserve will keep interest rates higher for longer.
“It’s still at pretty low levels in terms of initial claims. But maybe the fact that it’s perked up on a week-over-week basis gives the Fed a little bit more fodder to pause next week,” said Emily Roland, co-chief investment strategist of John Hancock Investment Management, in an interview at Bloomberg’s New York office.
The tech-heavy Nasdaq 100 added 1.2%, while the Russell 2000 index fell 0.2%, paring its gains for the week to roughly 3%. Among individual movers, Carvana Co. surged 56% on a forecast for better financial results. GameStop Corp. plunged 17% after firing its chief executive and reporting a sales miss. And Adobe Inc. rose 4.5% on plans to sell a new AI subscription with copyright services.
Oil prices were also lower, weighing on Treasury yields.
Investors are reassessing the trajectory of Fed policy after central banks in Australia and Canada this week unexpectedly raised rates. However, Evercore ISI’s Krishna Guha said market moves based on those central bank actions should fade.
“The Fed is the price-setter here, the others are the price-takers, and we should not confuse the two,” Guha said. “They are raising rates in part because they think the Fed will hike once more and if they fail to match this they risk FX depreciation.”
In Europe, the Stoxx 600 ended little changed with SBB, the company at the center of Sweden’s property crisis, down 12%. The group, also known as Samhallsbyggnadsbolaget i Norden AB, was sent even further into junk territory by S&P Global Ratings, a move that will worsen the already severe funding crunch.
In currencies, the Turkish lira stabilized against the dollar after state lenders began supporting the currency again. The lira has endured a historic selloff recently on speculation Turkey might chang its long-held stance of state interventions. Elsewhere, the yen strengthened after Japan’s economy grew faster than expected in the first quarter.
Key events this week:
- China PPI, CPI, Friday
Stocks
- The S&P 500 rose 0.6% as of 2:40 p.m. New York time
- The Nasdaq 100 rose 1.1%
- The Dow Jones Industrial Average rose 0.5%
- The MSCI World index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.6%
- The euro rose 0.8% to $1.0780
- The British pound rose 0.9% to $1.2555
- The Japanese yen rose 0.8% to 138.99 per dollar
Cryptocurrencies
- Bitcoin rose 0.5% to $26,498.83
- Ether rose 0.2% to $1,845.46
Bonds
- The yield on 10-year Treasuries declined eight basis points to 3.72%
- Germany’s 10-year yield declined five basis points to 2.40%
- Britain’s 10-year yield declined two basis points to 4.23%
Commodities
- West Texas Intermediate crude fell 1.8% to $71.26 a barrel
- Gold futures rose 1.1% to $1,979 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from David Watkins, Namitha Jagadeesh and Lynn Thomasson.
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