- U.S. stocks closed higher on Thursday following a sharp rally that signalled the end of a three-day selloff
- All three major indexes posted hefty gains, with the S&P 500 recording its largest climb in more than a month
- Of the S&P 500’s 11 major sectors, 10 ended in the green, with industrials enjoying the largest gain
- Energy was the only loser, shedding 1.4 per cent following a drop in crude prices
- All up, the Dow Jones Industrial Average rose 1.29 per cent, while the S&P 500 gained 1.22 per cent and the NASDAQ jumped 0.72 per cent
U.S. stocks closed higher on Thursday following a sharp rally that signalled the end of a three-day selloff.
All three major indexes posted hefty gains, with the S&P 500 recording its largest climb in more than a month while the NASDAQ — weighed down by Tesla — picked up the rear.
Recent economic data has fuelled concerns about inflation as scarcity of both materials and workers threatens to send prices surging in the face of a demand boom.
“If this is a footrace, supply chains are still tying their shoes,” said David Carter, chief investment officer at New York-based Lenox Wealth Advisors.
“But they will catch up with demand fairly quickly.”
That said, investors still seem to be optimistic, as shown by a strong performance in small-cap companies, chips and transport — those stocks that stand to gain as the U.S. emerges from the pandemic.
“Sectors and stocks that were hurt most significantly by yesterday’s sell-off rebounded strongly today given that economic growth is expected to remain strong throughout the year and any inflation is likely to be temporary,” Carter added.
Meanwhile, new applications for unemployment insurance continue to fall, according to jobless claims data from the U.S. Labour Department that hit a 14-month low.
The data also indicated a surge in producer prices last month, adding to the existing narrative outlined in Wednesday’s consumer prices report.
“The inflation boogeyman is back right on cue,” Carter said. “And will continue to spook markets for the coming months.”
That said, the rise in prices was broadly expected, and the U.S. Federal Reserve has made repeated assurances that it does not anticipate this spike turning into sustained, long-term inflation.
Of the S&P 500’s 11 major sectors, 10 ended in the green, with industrials enjoying the largest gain.
Energy was the only loser, shedding 1.4 per cent following a drop in crude prices.
All up, the Dow Jones Industrial Average rose 1.29 per cent, while the S&P 500 gained 1.22 per cent and the NASDAQ jumped 0.72 per cent.