U.S. stocks traded marginally higher Thursday, with investors searching for fresh impetus as they digested more corporate earnings.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average rose 30 points, or 0.1%, the S&P 500 climbed 3 points, or 0.1%, and the NASDAQ Composite rose just 2 points, or 0.1%.
Investors try to gauge U.S. economic health The main indices rallied strongly on Wednesday after slightly softer-than-expected consumer price index data saw traders grow more convinced that the Federal Reserve will begin cutting interest rates in September.
Still, while inflation did ease in April, it still remained well above the Fed’s 2% annual target. It also came on the heels of a stronger-than-expected producer price index print on Tuesday.
Data released earlier Thursday showed that the number of Americans filing for first-time unemployment benefits was higher than anticipated last week, although the figure declined compared to the prior period.
Initial jobless claims in the U.S. fell to 222,000 in week ended on May 11, down from an upwardly revised total of 232,000 in the previous week. Economists had called for a reading of 219,000.
The numbers come as officials at the Federal Reserve attempt to assess the health of the U.S. jobs market.
Signs of softening in labor demand could relieve some upward pressure on wages and, by extension, inflation, potentially bolstering the case for the Fed to cut interest rates down from more than two-decade highs.
Data earlier this month showed that the U.S. economy added the fewest number of jobs in six months in April, while the pace of annual wage growth dropped below 4% for the first time in almost three years.
Weak retail sales data for April, released on Wednesday, also pushed up hopes that inflation will cool in the coming months.
“Fed funds futures markets are now pricing in around 51 basis points of cuts in 2024, in line with our own base case for two 25-basis point Fed rate cuts this year, starting in September,” UBS strategists commented.
Chubb hits record high In the corporate sector, the main earnings release came from low-cost big-box chain Walmart (NYSE:WMT).
Its stock surged over 6% after the retailer reported first-quarter income and revenue that topped analysts' expectations, boosted by strength in its e-commerce business.
Elsewhere, Chubb (NYSE:CB) stock rose 6%, to a record high, after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) revealed it had taken a $6.72 billion stake in the insurer.
Meta Platforms (NASDAQ:META) stock fell 1% after the European Commission launched a investigation into the Facebook parent over alleged breaches of the bloc’s strict online content law to do with child safety risks.
Oil continues positive trend Crude prices rose Thursday, continuing the recent positive tone following the U.S. consumer inflation release and a bigger-than-expected draw in U.S. inventories.
By 09:35 ET, U.S. crude futures traded 1% higher at $79.44 per barrel, while the Brent contract climbed 0.8% to $83.41 a barrel.
The inflation data bolstered the prospect of lower interest rates, potentially lifting future global economic activity and, by extension, oil demand.
Official data on Wednesday also showed that U.S. oil inventories shrank by a bigger-than-expected 2.5 million barrels in the week to May 10, increasing hopes that demand was improving in the world’s biggest fuel consumer, especially as the travel-heavy summer season approaches.
