A rally in technology stocks resumed Thursday, pushing the S&P 500’s gains since an October low past 20 per cent, the marker of a bull market.

A jump in jobless claims to the highest since October 2021 delivered a boost to the tech sector, which had been flagging under speculation the Federal Reserve will keep interest rates higher for longer. The jump in claims shows the labor market, while largely resilient, is starting to show signs of cooling. 

“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 S&P 500 added 0.6 per cent while the tech-heavy Nasdaq 100 added 1.3 per cent as chipmakers including Nvidia Corp. and Advanced Micro Devices were among the biggest gainers amid the frenzy in stocks linked to artificial intelligence. Adobe Inc. also gained 5 per cent on plans for a new AI subscription with copyright services. 

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.”

Others are less convinced the Federal Reserve will turn dovish soon.

“The Fed may not be as aggressive in easing policy because there is this cost now to higher inflation, and inflation is well above trend,” said Komson Silapachai, strategist at Sage Advisory. “You could see a situation where the Fed waits until things are really, really bad before they cut rates or start QE again. I think that’s the risk to markets here.”

In Europe, the Stoxx 600 ended little changed with SBB, the company at the center of Sweden’s property crisis, down 12 per cent. 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 per cent as of 4:02 p.m. New York time
• The Nasdaq 100 rose 1.3 per cent
• The Dow Jones Industrial Average rose 0.5 per cent
• The MSCI World index fell 0.3 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.6 per cent
• The euro rose 0.8 per cent to US$1.0781
• The British pound rose 1 per cent to US$1.2559
• The Japanese yen rose 0.9 per cent to 138.89 per dollar

Cryptocurrencies

• Bitcoin rose 0.6 per cent to US$26,527.62
• Ether rose 0.3 per cent to US$1,847.31

Bonds

• The yield on 10-year Treasuries declined eight basis points to 3.71 per cent
• Germany’s 10-year yield declined five basis points to 2.40 per cent
• Britain’s 10-year yield declined two basis points to 4.23 per cent

Commodities

• West Texas Intermediate crude fell 2.1 per cent to US$71 a barrel
• Gold futures rose 1.1 per cent to US$1,979.90 an ounce