Robust bank profits , data ofLower inflation and a solid labor market update put stocks at their best for months on Thursday, as the market advanced decisively after weeks of sideways wobbling.
The S&P 500 rose 1.7%, its best day since early March, as a widespread surge in materials company stock prices , technology and healthcare lifted the index.
The gains suggest some investors could overcome concerns about persistent price increases, a slowdown apparent economic growth and the Federal Reserve's plans to cut some of the programs that have supported markets since the onset of the crisis. In September, this constellation of worries sent the market down 4.8% in its worst month since the start of the pandemic.
But on Thursday, earnings reports from big banks set the tone by raising financial shares.
Bank of America rose by 4, 5% after beating analysts' expectations for its third quarter numbers. The bank's negotiators have collected a record advisory fee of $ 654 million amid a M&A boom on Wall Street. Morgan Stanley also brought record revenue from advising companies on transactions, bolstering its bottom line and raising its share price by around 2.5%.
Bank results marked the start of the crucial third quarter earnings season.
Some analystes warned that it could be a judgmental moment for investors as sky-high expectations collide with the realities of rising costs and production issues that many companies face. amid the disorderly recovery of the pandemic.
But on Thursday, investors found reason to be excited about the figures reported by the companies.
Pharmacy giant Walgreens Boots Alliance has exceeded expectations, sending its shares up to over 7 per cent. The retailer said easing pandemic restrictions helped boost sales, as did a higher than expected coronavirus vaccination rate. Shares of rivals CVS Health and Rite Aid were also higher.
Insurer UnitedHealth Group also did better thane expected last quarter, raising its price by more than 4%. .
Economically, the latest update on the labor market, in the form of weekly figures on new unemployment insurance claims, helped allay some concerns. In a good sign, claims fell faster than Wall Street economists expected, hitting a new pandemic-era low.
" We believe the job market continues to recover, "Daniel Silver, economist at JPMorgan Chase, wrote in a note to clients after the report.
On the inflation front, the Producer Price Index - a wholesale price indicator that will likely trickle down to consumers over the next few months - has risen less rapidly than expected, dampening downward pressure on prices. concerns about soaring prices.This is the smallest increase since June and the first deceleration in 16 months, noted economists from Oxford Economics analysts.
The yield on the 10-year Treasury bill - which tends to rise when inflationary concerns intensify - edged down to 1.52%.
Prices in commodity markets, however, continued to show that inflationary pressures are not going away anytime soon. West Texas Intermediate, the benchmark US crude oil, rose 1.1% to $ 81.31 per barrel, nearing a new high in seven years. The main industrial ls also increased. Copper, used in a wide range of construction and industrial environments, jumped 2.4%.
"Investors are mostly convinced that a large part of inflation will turn out to beHowever, this is why commodities should have strong support for the rest of the year, ”wrote Edward Moya, senior market analyst at Oanda, a foreign exchange and brokerage firm.
European stock indices were higher, with the Stoxx Europe 600 jumping 1.2%. Asian markets were mostly higher.
Coral Murphy Marcos and Lananh Nguyen reports contributed.