Wall Street rallies to its best day since 2022 on encouraging unemployment data; S&P 500 jumps 2.3%

NEW YORK (AP) — U.S. stocks rallied Thursday in Wall Street’s latest sharp swerve after a better-than-expected report on unemployment eased worries about the slowing economy.

The S&P 500 jumped 2.3% for its best day since 2022 and shaved off all but 0.5% of its loss from what was a brutal start to the week. The Dow Jones Industrial Average rose 683 points, or 1.8%, and the Nasdaq composite climbed 2.9% as Nvidia and other Big Tech stocks helped lead the way.

Treasury yields also climbed in the bond market in a signal investors are feeling less worried about the economy after a report showed fewer U.S. workers applied for unemployment benefits last week. The number was better than economists expected.

It was exactly a week ago that worse-than-expected data on unemployment claims helped enflame worries that the Federal Reserve has kept interest rates at too high of an economy-slowing level for too long in order to beat inflation. That helped send markets reeling, along with a rate hike by the Bank of Japan that sent shockwaves worldwide by scrambling a favorite trade among some hedge funds.

At the worst of it, at least so far, the S&P 500 was down nearly 10% from its all-time high set last month. Such drops are regular occurrences on Wall Street, and “corrections” of 10% happen roughly every year or two. After Thursday's jump, the index is back within about 6% of its record.

What made this decline particularly scary was how quickly it happened. A measure of how much investors are paying to protect themselves from future drops for the S&P 500 briefly surged toward its highest level since the COVID crash of 2020.

Still, the market’s swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession, according to strategists at BNP Paribas.

They say it looks more similar to the “flash crash” of 2010 than the 2008 global financial crisis or the 2020 recession caused by the pandemic.

Of course, markets have been quick to turn over the past week regardless of any long-term predictions.

“Today’s jobless claims data may ease some of the concerns raised by last week’s soft jobs report,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. “But with inflation data due out next week and the stock market still working through its biggest pullback of the year, it’s unclear how much this will move the sentiment needle.”

In the meantime, big U.S. companies continue to turn in profit reports for the spring that are mostly better than analysts expected.

Eli Lilly jumped 9.5% to help lead the market after it delivered stronger profit and revenue than Wall Street had forecast. Sales of its Mounjaro diabetes treatment and its Zepbound weight-loss counterpart are booming, and the company raised its financial forecast for the year.

Big Tech stocks also rose to claw back some of their sharp losses from the last month.

After a handful of them almost singlehandedly drove the S&P 500 to dozens of all-time highs this year, the group known as the “Magnificent Seven” lost momentum last month amid criticism their prices soared too high in investors’ frenzy around artificial-intelligence technology.

How this handful of stocks performs carries extra impact on the S&P 500 and other indexes because they’re by far the market’s most valuable companies. Nvidia, which has become the poster child for the AI trade, rose 6.1% to trim its loss for the week so far to 2.1%, and it was the day’s strongest single force pushing upward on the S&P 500.

Gains of 1.7% for Apple and 4.2% for Meta Platforms were also big propellants, along with Eli Lilly.

They helped offset a drop of 11.3% for McKesson, which topped analysts’ expectations for profit in the latest quarter but fell short on revenue. It said growth slowed in its medical-surgical business.

Bumble, the Texas-based dating app, lost more than a quarter of its value, 29.2%, after its forecast for revenue in the third quarter came in well below Wall Street’s.

All told, the S&P 500 rallied 119.81 points to 5,319.31. The Dow gained 683.04 to 39,446.49, and the Nasdaq composite rose 464.22 to 16,660.02.

In the bond market, the yield on the 10-year Treasury rose to 3.99% from 3.95% late Wednesday.

In stock markets abroad, indexes were mixed across Asia and Europe. In Japan, which has been home to some of the wildest moves in global markets, the Nikkei 225 ticked down by 0.7%. That looked like a ripple following its tidal swings of down 12.4% and up 10.2% to start the week.

AP Business Writers Yuri Kageyama and Matt Ott contributed.

The monitor of specialist Anthony Matesic is seen through his glasses as he works on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

Specialist John O'Hara works at his post on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

Traders work on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

A trader works on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

A trader works on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

Trader Robert Moran works in his booth on the floor of the New York Stock Exchange, Wednesday, Aug. 7, 2024. (AP Photo/Richard Drew)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, and the KOSDAQ (Korean Securities Dealers Automated Quotations) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Aug. 8, 2024. (AP Photo/Ahn Young-joon)

Currency traders watch a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Aug. 8, 2024. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Aug. 8, 2024. (AP Photo/Ahn Young-joon)

Taiwanese company Gold Apollo said Wednesday that it authorized its brand on the pagers that exploded in Lebanon and Syria but that another company based in Budapest manufactured them.

Hundreds of handheld pagers exploded almost simultaneously Tuesday across Lebanon and in parts of Syria, killing at least nine people, government and Hezbollah officials said. Officials pointed the finger at Israel in what appeared to be a sophisticated remote attack. The Israeli military declined to comment.

Hezbollah began striking Israel almost immediately after Hamas’ Oct. 7 attack that sparked the Israel-Hamas war. Since then, Israel and Hezbollah have exchanged fire daily, coming close to a full-blown war on several occasions and forcing tens of thousands on both sides of the border to evacuate their homes.

Gaza’s Health Ministry says more than 41,000 Palestinians have been killed in the territory since Hamas’ Oct. 7 attack. The ministry does not differentiate between fighters and civilians in its count but says a little over half of those killed were women and children. Israel says it has killed over 17,000 militants, without providing evidence.

Here's the latest:

JERUSALEM — The Israeli military says four soldiers were killed in southern Gaza and five others were wounded, with three of them in serious condition.

The deaths on Tuesday came nearly a year into the war in Gaza, which was triggered by Hamas’ Oct. 7 attack. The army did not describe the circumstances, but Israeli media reported that the soldiers were killed by a hidden bomb that exploded inside a building.

One of the four, Staff Sgt. Agam Naim, an army paramedic, was the first female soldier to have been killed in combat in Gaza, according to Israeli media.

Hamas and other armed groups remain active across the territory despite months of heavy Israeli bombardment and ground operations that have destroyed vast areas and displaced most of the population.

Israel says 346 of its soldiers have been killed since the start of ground operations last October. The military says it has killed over 17,000 militants, without providing evidence.

TAIPEI, Taiwan — Taiwanese company Gold Apollo said Wednesday that it authorized its brand on the pagers that exploded in Lebanon and Syria but that another company based in Budapest manufactured them.

Pagers used by hundreds of members of the militant group Hezbollah exploded near-simultaneously Tuesday in Lebanon and Syria, killing at least nine people, including an 8-year-old girl, and wounding more than 2,000. Hezbollah and the Lebanese government blamed Israel for what appeared to be a sophisticated remote attack.

The AR-924 pagers used by the militants were manufactured by BAC Consulting KFT, based in Hungary’s capital, according to a statement released Wednesday by Gold Apollo.

“According to the cooperation agreement, we authorize BAC to use our brand trademark for product sales in designated regions, but the design and manufacturing of the products are solely the responsibility of BAC,” the statement read.

Gold Apollo chair Hsu Ching-kuang told journalists Wednesday that his company has had a licensing agreement with BAC for the past three years, but did not provide evidence of the contract.

The AR-924 pager, advertised as being “rugged,” contains a rechargeable lithium battery, according to specifications once advertised on Gold Apollo’s website before it was apparently taken down Tuesday after the sabotage attack. It could receive text messages of up to 100 characters and claimed to have up to 85 days of battery life. That’s something that would be crucial in Lebanon, where electricity outages have been common as the tiny nation on the Mediterranean Sea has faced years of economic collapse. Pagers also run on a different wireless network than mobile phones, making them more resilient in emergencies — one of the reasons why many hospitals worldwide still rely on them.

FILE - Israeli soldiers move next to destroyed buildings following Israeli strikes during a ground operation in the Gaza Strip, Sept. 13, 2024. (AP Photo/Leo Correa, File)

Civil Defense first-responders carry a man who was wounded after his handheld pager exploded, in the southern port city of Sidon, Lebanon, Tuesday, Sept. 17, 2024.(AP Photo)

People gather outside the American University hospital after the arrival of several people who were wounded by exploding handheld pagers, in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

Palestinians in Lebanon wave their national flags during a protest in front of the United Nations Relief and Works Agency (UNRWA) headquarters in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Bilal Hussein)

People gather around an ambulance carrying wounded people whose handheld pager exploded, at the emergency entrance of the American University hospital in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

The supermoon rises behind the houses in Mas'ade, a village in the Israeli-annexed Golan Heights, Tuesday, Sept. 17, 2024. (AP Photo/Leo Correa)

A Lebanese Red Cross volunteer collects blood donations for those who were injured by their exploded handheld pagers, Tuesday, Sept. 17, 2024, at a Red Cross center in the southern port city of Sidon, Lebanon. (AP Photo/Mohammed Zaatari)