US stocks had their best day since November 2022, after a surprise drop in jobless claims helped ease concerns about a slowing economy.
The benchmark S&P 500 index ended the day up 2.3%. The Dow Jones Industrial Average rose 1.8% and the Nasdaq rose 2.9%.
Stocks in Asia also edged higher, recovering some of their losses from earlier in the week. In Hong Kong, the Hang Seng Index rose about 1.7%, while South Korea’s Kospi rose more than 1%. In Japan, shares on the Nikkei 225 and Topix were largely flat.
This comes after Japanese stocks had their worst day since 1987 earlier in the week, causing a the great collapse of global markets.
“The latest jobless claims data, while not typically a major market event, supports the view that recent pessimism may have been overdone,” said a report from UBS Global Wealth Management’s chief investment office.
Official data from the US Department of Labor showed initial jobless claims in the United States fell more than expected to 233,000 last week.
In spite of clear recovery In global markets, analysts warn that trading is likely to remain choppy for now.
“Market volatility is creating trading opportunities for short-term investors,” said Peter McGuire from XM.com.
“The election season is going to be very bumpy and we are all waiting [US Federal Reserve] policy decision in September.”
Last week, the Federal Reserve postponed cutting interest rates – a move that typically boosts growth – in contrast to other central banks such as Bank of England.
However, market volatility this week has fueled further speculation about the timing and extent of the Fed’s cuts to borrowing costs.
“[The] “The Fed is now likely to cut rates by as much as 50 basis points in September, which will support valuation expansion in the market,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.
