Stocks and index ETFs jumped again on Thursday, with two of the key averages reaching new highs, as investors piled back into tech stocks amid dampening interest rate concerns.
The S&P 500 climbed 1.44% to hit an all-time high for the first time in nearly a month. Meanwhile, the Dow Jones Industrial Average also added 1.04% to notch another intraday record. The Nasdaq Composite, which has been trading lower recently, surged 2.52% as investors continued to buy the dip in tech stocks like Tesla, Apple, Facebook, and Netflix.
Investors sentiment was also boosted by a somewhat better-than-expected reading on weekly jobless claims data. The Labor Department revealed that first-time filings for unemployment insurance in the week finishing March 6 reached a seasonally adjusted total of 712,000, below the Dow Jones estimate of 725,000.
“The drop in jobless claims is another win for the week, and a solid sign that we’re making some strides toward pre-pandemic life,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. “Combined with stimulus relief in sight and a muted CPI read yesterday plus increased vaccinations and decreased business restrictions, there’s a pretty optimistic picture being painted.”
While interest rates dropped marginally recently, the benchmark 10-year Treasury yield, which had retreated from its recent high of 1.6%, had little movement on Thursday, remaining near 1.51% .
The move in the Nasdaq Composite came swiftly after the tech-heavy index slipped into correction territory on Monday, where it fell over 10% from its high. The benchmark is now just 6% off its record high.
“The faster-than-expected acceleration of U.S. economic growth appears to be lifting inflation and longer-term interest rates,” Gary Schlossberg from the Wells Fargo Investment Institute said in a note. “The pace of these increases have been a recent concern to investors, but a recovery in interest rates and inflation is a typical occurrence early in a recover – faster this time, in our opinion, because of the unusually strong economic growth rebound.”
Investors are also eager to see more economic stimulus in their pockets, as House Democrats passed a $1.9 trillion coronavirus relief bill Wednesday. President Biden is expected to sign it into law Friday.
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