US Markets Open Higher As Investors Evaluate Jobless Claims Data

The US markets rose on Thursday after fresh labour market data sent mixed signals regarding the health of the US economy as questions about the Fed cutting rates continued.

The three major averages kicked off Wednesday's session in green. While the Dow Jones Industrial Average was trading 63 points higher, the S&P 500 and Nasdaq Composite both gained 0.1%.

Nvidia Corp. continued to fall after it experienced its largest two-day drop since October 2022, amid growing scepticism about the artificial intelligence sector. Meanwhile, Tesla Inc. saw a rise in its stock following news of plans to introduce its driver assistance system in China and Europe.

While stocks have stabilised for the moment, that doesn’t mean volatility won’t resume, according to Andrew Brenner at NatAlliance Securities.

“If the economy shows strength tomorrow in nonfarm payrolls, then equities should do better initially, but if rates get slaughtered, that won’t be good,” Brenner said.

“If rates rally tomorrow because of a weak number, that won’t be good for equity either. A Fed of 50 would also have a negative context for equities,” he added.

Jobless claims dropped to an eight-week low and totalled at 2,27,000 for the week ending Aug. 31, according to the Labour Department. This is lower than the 2,30,000 forecast by Bloomberg.

The payroll processor ADP reported that private businesses added just 99,000 jobs in August, marking the smallest increase since January 2021. However, it missed 1,40,000 estimates by Dow Jones. Other indicators also suggest a notable weakening in hiring activity.

The US stock index futures were lower for the third straight day on Wednesday, with Nasdaq 100 futures down 0.4% and S&P 500 futures falling 0.1% as of 9 a.m. Eastern time. However, the Dow Jones Industrial Average futures were up 0.1%.

US 10-year yields declined on Thursday morning at 3.73%, while the yield on two-year Treasury bonds advanced two basis points.

Brent futures was heading for the first gain in five days, on the back of OPEC+ getting closer to an agreement on delaying an increase in oil production. West Texas Intermediate was trading below $70 per barrel.

(With Input From Bloomberg)