U.S. stocks took a breather Thursday after a Big Tech-fueled winning session, with more labor data coming available to test investors’ growing hopes for rate cuts.
S&P 500 futures (ES=F) bounced along the flatline after a record close. Contracts on the Dow Jones Industrial Average (YM=F) and the tech-heavy Nasdaq 100 (NQ=F) were also little changed.
Stocks are rallying after the roaring rally that also took the Nasdaq Composite (^IXIC) to a record high on Wednesday. Technology stocks contributed to the gains, with Nvidia (NVDA) overtaking Apple (AAPL) as the second-largest U.S. company as both reached a market value of more than $3 trillion.
Shares of AI chipmaker Nvidia continued to rise in pre-market trading, up about 2%. But other megacap tech companies faltered, with Apple, Meta (META) and Microsoft (MSFT) all losing slight ground.
Meanwhile, government bond yields rebounded from declines that boosted the stock market rally. The benchmark 10-year yield (^TNX) rose slightly to almost 4.30%, reaching the lowest level since Wednesday in March.
The market has seen the recent soft economic data as a reason to put another policy pivot on the table from the Federal Reserve, with ADP’s private payrolls missing only the latest sign of a labor market cooling. Traders now see a 69% chance of a rate cut in September, up from about 50% a week ago, according to the CME FedWatch tool.
Read more: What influence does the labor market have on inflation?
New data on unemployment claims, job losses and labor costs expected later Thursday could get more attention than usual as investors gauge whether the Fed will deliver the soft landing it wants for the economy. But the countdown is on for Friday’s May monthly jobs report, which is considered crucial for stocks.
Among individual movers, shares of Lululemon (LULU) rose 9% in pre-market trading after the athleisure apparel maker raised its earnings outlook and stock buyback program.
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