By Shristi Achar A and David Carnevali
(RockedBuzz via Reuters) – US stocks closed higher on Thursday, regaining some of its momentum on a rebound in technology stocks, as volatility dropped to record lows ahead of a hectic economic and political calendar next week.
The CBOE Volatility Index, also known as the Wall Street Fear Gauge, fell to a new post-pandemic all-time low.
“What you’re really seeing in the vol market is an unwillingness to engage,” said David Bianco, chief investment officer for the Americas for asset manager DWS Group. “You just paralyzed investors.”
Investors were sitting on the sidelines before inflation data and a Federal Reserve policy meeting next week.
According to CMEGroup’s Fedwatch tool, traders estimated a 73% probability that the US central bank will keep interest rates in the current 5%-5.25% range during its June 13-14 monetary policy meeting. However, they see a 50% chance of a rate hike in July.
The two-year Treasury yield, which tends to move in lockstep with short-term rate expectations, fell from one-week highs to 4.51% after a sharp rise in weekly jobless claims signaled a weakening of the labor market.
The US Labor Department is due to release inflation data on June 13, the first day of the Fed meeting. The numbers should show that consumer prices cooled slightly in May, but core prices remained sticky.
Meanwhile, a rebound in tech and megacap stocks helped the major indexes regain ground amid low volume.
Heavyweight Amazon.com Inc gained 2.49% as Wells Fargo initiated hedging on the company with an “overweight” rating, while Nvidia Corp, Apple Inc and Tesla Inc rose between 1.55% and 1.55%. 4.58%.
GameStop Corp lost 17.89% as billionaire investor Ryan Cohen took over as executive chairman after the video game retailer ousted its CEO and posted a larger-than-expected quarterly loss.
The Dow Jones Industrial Average rose 168.59 points, or 0.5%, to 33,833.61, the S&P 500 gained 26.41 points, or 0.62%, to 4,293.93 and the Nasdaq Composite added 133.63 points, or 1.02%, to 13,238.52.
Among the 11 major S&P sectors, consumer discretionary led the charge, while housing and energy indexes fell, the latter hit by falling oil prices.
Adobe jumped 4.95% after Piper Sandler raised its price target on the stock to $500. The maker of the Photoshop software said it was offering its “Firefly” AI tool to large companies.
Lucid Group plunged 1.88% after the head of the US luxury electric vehicle maker’s China operations, Zhu Jiang, said the company was preparing to enter the world’s biggest auto market.
Advancing issues outnumbered declining issues on the NYSE by a ratio of 1.16 to 1; on the Nasdaq, a ratio of 1.02 to 1 favored the advanced.
The S&P 500 made 12 new 52-week highs and two new lows; the Nasdaq Composite recorded 71 new highs and 43 new lows.
(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi and Marguerita Choy)