NEW YORK CITY, RAW – The S&P 500 has risen in choppy trading, with gains in tech shares countering losses in cyclical sectors, as investors took the pulse of the economic rebound and gauged when the Federal Reserve might temper its monetary stimulus.
Tech also supported the Nasdaq on Thursday, while economically sensitive sectors such as energy and materials were weak.
Data showed that the number of Americans filing new claims for unemployment benefits fell to a 17-month low last week, pointing to another month of robust job growth.
Stocks had sold off sharply a day earlier after minutes from the Fed’s July meeting showed officials felt it was possible that a key benchmark for decreasing support “could be reached this year.”
“It’s very much investors grappling with the growth outlook for the global economy, and how aggressive the Fed will taper when they get around to it,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
The Dow Jones Industrial Average fell 63.34 points, or 0.18 per cent, to 34,897.35, the S&P 500 gained 5.63 points, or 0.13 per cent, to 4,405.9 and the Nasdaq Composite added 15.87 points, or 0.11 per cent, to 14,541.79.
Technology shined among S&P 500 sectors, helped by Nvidia Corp shares. The chip company forecast third-quarter revenue above Wall Street expectations late on Wednesday as it benefits from a boom in demand.
Consumer staples and real estate – generally considered defensive sectors – were higher.
Financials and industrials were among the sectors in the red.
In company news, shares of US department store chains Macy’s Inc and Kohl’s Corp both rose sharply, following increased annual sales forecasts.
A rebound in the US economy including a stellar second-quarter corporate earnings season on top of accommodative monetary policy has underpinned positive sentiment for equities, with the S&P 500 up about 100 per cent since its March 2020 pandemic low.
But with the market in a period that has seasonally been weak historically, investors have said stocks may be due for a significant drop, with the S&P 500 yet to experience a 5 per cent pullback this year.
Focus is shifting to the Fed’s annual research conference in Jackson Hole, Wyoming, next week for any read about the central bank’s next steps.
“The key economic variable continues to be inflation,” said Jeff Mortimer, director of investment strategy at BNY Mellon Wealth Management. “Is it temporary, is it permanent, what number will the Fed tolerate in order to achieve its full employment mandate?”