Stocks rallied across the board on Thursday with tech leading markets higher and ether (ETH-USD) crossing $2,000 for the first time this year ahead of Friday’s highly-anticipated bank earnings.
When the closing bell rang on Thursday, the S&P 500 (^GSPC) was higher by 1.33%, the Dow Jones Industrial Average (^DJI) was up 1.14%, and the tech-heavy Nasdaq Composite (^IXIC) gained 1.99%.
The small cap Russell 2000 was also higher by more than 1.3% while gold prices were up 1.4% to trade as high as $2,050 an ounce.
Bitcoin (BTC-USD) gained 1.3% to trade back above $30,000 alongside ethereum’s rally to new 2023 highs.
Thursday’s rally in ethereum was attributed to the successful rollout of another upgrade to the ethereum blockchain. Crypto-exposed stocks including Coinbase (COIN), Block (SQ), and MicroStrategy (MSTR) were all higher on Thursday.
The March read on producer prices out Thursday morning also showed some additional moderation in inflation pressures last month, news taken by investors as a potential sign the Federal Reserve may be closer to ending its rate-hiking campaign sooner than expected.
Producer prices fell 0.5% in March and rose just 2.7% over the prior year. The BLS said in its release that two-thirds of the drop in producer prices were attributable to a 1% decline in prices for goods, largely driven by gas prices falling last month. On a “core” basis, which excludes the volatile costs of food and energy, producer prices rose 0.1% last month.
Labor market data out Thursday morning also suggested the job market continues to soften, with initial filings for unemployment insurance totaling 239,000 for the week ended April 8, the highest since January 2022, according to the government’s latest data.
“Initial jobless claims rose last week, but the labor market stayed tight. We expect claims to trend higher through the rest of the year and peak in Q4 as the economy begins to emerge from a mild recession,” wrote Oren Klachkin, lead US economist at Oxford Economics, in a note to clients on Thursday. “The upcoming labor market downturn will be modest since the drop in demand will be fairly modest and the labor pool will stay relatively small.”
On the earnings side, investors are bracing for Friday morning’s rush of bank earnings with JPMorgan (JPM), Citi (C), and Wells Fargo (WFC) each expected to report results.
Quarterly results from Delta Air Lines (DAL) served as the corporate highlight early Thursday, with these results showing the company missed Wall Street expectations on both the top and bottom lines. Delta shares fell 1.1% on the session.
Delta CEO Ed Bastian told Yahoo Finance on Thursday that “given all the uncertainty and some of the volatility that we see and what seasonally is our weakest quarter of the year, we were quite pleased and thought it was a real solid performance.”
Stocks fell on Wednesday after the minutes from the Federal Reserve’s latest policy meeting showed some officials forecasting the economy tipping into recession later in 2023.
“For some time, the forecast for the U.S. economy prepared by the staff had featured subdued real GDP growth for this year and some softening in the labor market,” the minutes read.
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”
The minutes ultimately revealed, however, that Fed officials were largely convinced the banking system would remain stable after multiple banks failed last month, likely keeping the central bank on track to raise interest rates again next month.
“The March FOMC minutes show that two weeks after the SVB failure, policymakers were still more worried, net, about upside inflation risk than the risk of a much sharper slowing in activity than they previously expected,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients on Wednesday.
“We doubt that this stance will survive contact with the incoming data over the next couple months.”
