Nasdaq gains ~2%, S&P and Dow rise more than 1% each after PPI, jobless claims data

US stocks rose on Thursday after economic data showed further moderation in inflationary pressures and signs of cooling in the resilient labor market.

In the late afternoon, the Nasdaq Composite (COMP.IND) had jumped 2.01% to 12,168.98 points, helped by a jump of more than 4% in Amazon shares (AMZN) as investors reacted favorably to the e-commerce giant’s annual CEO letter and its new tools to use for artificial intelligence. The high-tech index was on track to break a three consecutive days of defeats. He has recorded losses in six of his last seven sessions.

The benchmark S&P 500 index (SP500) was 1.30% higher at 4,145.34 points, while the blue chip Dow Jones (DJI) advanced 1.05% at 33,999.12 points.

Of the 11 S&P sectors, nine were trading in the green, led by the heavy consumer discretionary, communication services and technology sectors. Utilities and real estate were the two losers.

Earlier in the day, March producer price index unexpectedly slipped 0.5% M/M from an expected 0.1% increase. On a Y/Y basis, the PPI came out at +2.7% against a consensus of +3.0%. Softer than expected report follows moderation in March headline consumer price index issue published Wednesday. The data broadly points to continued disinflation and bolstered expectations that the Federal Reserve might consider pausing its rate hike campaign.

Adding to those hopes, data showed the number of Americans filing for unemployment benefit claims rose last week, suggesting a cooling of what has been a very resilient labor market.

“Initial claims for the week ending April 8 increased by 11,000 to 239,000. After seasonal factor revisions, initial claims increased between January and March, and last week’s claims numbers are at the middle of the range that has prevailed since late February. So the level of claims is significantly above the 2022 average, although the upward momentum since the start of the year appears to have moderated recently,” said Michael JPMorgan’s Feroli in a note.

“The March PPI is well below expectations, with the headline down 0.5%, the biggest monthly drop since the start of 2020, led by a 6.4% drop in energy prices “, added Feroli.

According to CME tool FedWatch, markets are now pricing in a nearly 67% chance of a 25 basis point hike at the Fed’s monetary policy committee meeting in May.

For fixed income markets, the 10-year long-term yield (US10Y) rose 2 basis points to 3.44%, while the more rate-sensitive 2-year rate (US2Y) was stable at 3.97%.

Also on Thursday was the first-quarter earnings season. The main American carrier Delta Air Lines (DAL) job a mixed report but provided optimistic advice. Major banks including JPMorgan (JPM) and Citigroup (VS) with health insurance giant UnitedHealth (A H) are set to announce their results on Friday.

Among the active movers, Enphase Energy (ENPH) and SolarEdge Technologies (SEDG) were the top two percentage gainers on the S&P 500 (SP500) After favorable comments from Deutsche Bank, which named the former as its top pick among solar stocks.

Meanwhile, Progressive (RPG) was the biggest percentage loser in the S&P after assignment shortfall.