On Thursday, Wall Street finished sharply higher at the end of a broad rally, bouncing back from three days of selling fueled by upbeat labor market numbers.
The Nasdaq, which is weighed by Tesla Inc, trailed the other two big US stock indices in terms of gains. Cyclical stocks, on the other hand, saw the most profits.
The Dow Jones Industrial Average increased by 433.79 points, or 1.29 %, to 34,021.45, the S&P 500 increased by 49.46 points, or 1.22 %, to 4,112.5, and the Nasdaq Composite Index increased by 93.31 points, or 0.72 %, to 13,124.99.
Recent economic evidence has sparked inflation concerns, as a shortage of both materials and labor threatens to drive up prices in the face of increased demand.
“If this is a footrace, supply chains are already tying their shoes,” David Carter, chief investment officer at New York City-based Lenox Wealth Advisors, said. “However, they can soon keep up with demand.”
Investors, on the other hand, continued to be focused on the “glass half full” side of the demand/supply equation on Thursday.
The outperformance of small caps, chips, and transportations, all economically responsive stocks that stand to benefit as the US recovers from the coronavirus pandemic contraction, demonstrates this.
“Sectors and stocks that were hit the hardest by yesterday’s selloff rebounded strongly today,” Carter said, noting that “economic growth is projected to stay high during the year and any inflation is likely to be temporary.”
According to jobless claims reports from the US Department of Labor (DOL), new applicants for unemployment benefits begin to decline, reaching a 14-month peak.
Producer prices rose last month, according to DOL reports, bolstering the inflation spike story from Wednesday’s consumer price index.
“Right on time, the inflation boogeyman reappears,” Carter said. “And will continue to frighten markets for the far future.”
However, that rates were commonly expected, and the US Federal Reserve has said repeatedly that it does not expect price spikes to turn into long-term inflation.
Bumble Inc, the parent company of the dating app Bumble, has fallen below its initial public offering mark, as investors remain wary of how soon consumers can return to in-person meetings.
Walt Disney Co. shares fluctuated during the day as investors awaited the company’s quarterly earnings, which are due after the closing bell.
Tesla’s stock continues to fall after CEO Elon Musk reiterated his earlier criticism of the cryptocurrency Bitcoin.