Thursday saw U.S. stocks conclude positively, with technology stocks recovering and providing the necessary boost. The CBOE Volatility index, also known as the fear gauge on Wall Street, reached a new low since the pandemic.
David Bianco, the Americas chief investment officer for DWS Group, commented on the situation, stating that there is a reluctance to participate in the volatility market, resulting in investor paralysis.
Investors remained cautious, awaiting next week’s inflation data and the Federal Reserve policy meeting. Based on CMEGroup’s Fedwatch tool, traders have priced in a 73% chance of the central bank maintaining interest rates within the current range of 5%-5.25% during the June 13-14 monetary policy meeting. However, they anticipate a 50% likelihood of a rate hike in July.
Following a significant rise in weekly jobless claims, indicating a weakening labor market, the two-year Treasury yield, which aligns with short-term rate expectations, retreated from its one-week highs to 4.51%.
The U.S. Labor Department is scheduled to release inflation data on June 13, coinciding with the first day of the Fed meeting. Analysts predict a slight cooling of consumer prices in May, although core prices are expected to remain steady.
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Meanwhile, thin trading volumes saw technology and mega-cap stocks bounce back, contributing to the recovery of major indexes. Notably, Amazon.com Inc rose by 2.49% after receiving an “overweight” rating from Wells Fargo. Additionally, Nvidia Corp, Apple Inc, and Tesla Inc experienced gains ranging from 1.55% to 4.58%.
On the other hand, GameStop Corp faced a significant decline of 17.89% as Ryan Cohen, a billionaire investor, assumed the position of executive chairman after the video-game retailer removed its CEO. Furthermore, the company reported a larger-than-expected quarterly loss.
The Dow Jones Industrial Average increased by 0.5%, or 168.59 points, reaching 33,833.61. Similarly, the S&P 500 climbed by 0.62%, or 26.41 points, closing at 4,293.93, while the Nasdaq Composite added 1.02%, or 133.63 points, reaching 13,238.52.
Among the 11 major sectors in the S&P 500, consumer discretionary stocks led the way, while real estate and energy indexes experienced slight declines, primarily due to a drop in oil prices.
Adobe witnessed a 4.95% surge after Piper Sandler raised its price target for the stock to $500. The company also announced the availability of its AI tool “Firefly” to large businesses.
However, Lucid Group faced a setback, with shares declining by 1.88%. The luxury electric-vehicle maker’s head of China operations, Zhu Jiang, stated that the company is preparing to enter the world’s largest auto market.
Advancing issues slightly outnumbered declining ones on the NYSE, with a ratio of 1.16-to-1, while on Nasdaq, advancers held a slight advantage with a ratio of 1.02-to-1.
The S&P 500 recorded 12 new 52-week highs and two new lows, while the Nasdaq Composite marked 71 new highs and 43 new lows.
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