Stocks regained their footing Thursday, rallying across the board as all three major U.S. indexes tallied major gains, though each remain well behind their all-time highs booked in July.
Stocks went back up Thursday.
The bellwether S&P 500 had its best day since Nov. 2022, gaining 2.3%, the tech-heavy Nasdaq Composite delivered its strongest gain since February, surging 2.9%, and the blue chip Dow Jones Industrial Average had its best day since July, rallying 1.8%, or 6.8 points.
Gains were widespread, with 90% of S&P constituents closing trading in the green and 12 of the index’s 13 sectors enjoying a 0.8% or better jump (utilities lagged with a 0.2% rise).
Notable individual risers included pharmaceutical giant Eli Lilly (up 9%), Silicon Valley giants Broadcom (7%), Intel (6%) and Nvidia (8%).
The rally came as panic about an imminent U.S. recession continued to unwind, with Thursday morning’s better-than-expected weekly unemployment claims sparking the stock gains.
The Dow is up 3% from its Monday intraday bottom, the Nasdaq 6% and the S&P 4%.
Before declaring the stock market slump over, the three major indexes still sit far below their July peaks, with the Nasdaq remaining in a more than 10% correction from its high and the Dow and S&P sitting 4% and 6% below their July closing highs, respectively. The U.S. is also not out of the woods in terms of a recession, with firms like JPMorgan Chase assigning 35% odds of such a downturn by the end of the year. Stocks are hardly valued as if investors expect a major slowdown in broader growth, as the S&P’s price-to-earnings ratio, which tracks company valuations compared to profits, is about 25% above its 20-year average, according to FactSet.
Up almost 12% year-to-date, including dividends, the S&P is comfortably on track to match its average annual return of 9.5% over the last 50 years. Pullbacks are a common trait of stock markets, and 5% or more pullbacks have occurred an average of three times annually dating back to the 1930s, according to Wells Fargo research.