US stocks experienced their strongest trading day since November 2022, buoyed by a surprising decline in unemployment claims that alleviated fears of an economic slowdown. The S&P 500 index surged by 2.3%, while the Dow Jones Industrial Average gained 1.8% and the Nasdaq soared by 2.9%.
Asian markets mirrored this positive trend, rebounding from earlier losses. The Hang Seng Index in Hong Kong rose approximately 1.7%, South Korea’s Kospi increased by over 1%, and Japan’s Nikkei 225 and Topix indices remained mostly flat despite earlier turbulence.
This uptick follows a challenging period for Japanese stocks, which faced their worst day since 1987 earlier in the week, triggering a substantial global market downturn.
Recent jobless claims from the US Labor Department revealed a more significant decline than anticipated, with first-time claims dropping to 233,000 last week. Analysts interpreted this data as a sign that recent market pessimism may have been overstated.
Despite the apparent recovery in global markets, experts caution that volatility may persist in the near term. Market fluctuations are creating potential trading opportunities for investors, particularly as the nation gears up for the upcoming election season and anticipates the US Federal Reserve’s decision on interest rates.
The Federal Reserve opted not to lower interest rates last week, diverging from the actions of other central banks. However, recent market instability has intensified speculation regarding future rate cuts. Analysts anticipate that the Fed may reduce rates by up to 50 basis points in September, potentially supporting broader market valuation expansion.
