The Nasdaq Composite added 1% as bond yields slipped, and Wall Street continued to weigh bearish risks.
The Dow Jones Industrial Average rose 37 points, or 0.1%. The S&P 500 rose 0.4%.
The tech-heavy Nasdaq outperformed other averages as market participants continued to consider the possibility of an economic slowdown, and the yield on the 10-year Treasury note fell to its lowest level in nearly two weeks. Yields move inversely to prices.
“The market action that we observed today and yesterday at least internally suggests that the market is becoming increasingly concerned with global economic growth, highlighting the fact that the US is the front end of the yield curve, Rates are going down a lot,” said Scott Ladner, chief investment officer at Horizon Investments.
A peek at the broader market index shows that more defensive stocks such as consumer staples, utilities, real estate and health care stocks outperformed, with each sector up 1%. Consumer staples stocks such as Clorox gained 5%.
Homebuilders helped fuel the consumer cyclical surge, as shares of Lenar and DR Horton both climbed more than 3% on Thursday.
Meanwhile, energy was the worst-performing sector in the S&P 500 as oil prices tumbled. Shares of Schlumberger fell 8%. Valero Energy and Philips 66 each fell 7%.
Federal Reserve Chairman Jerome Powell reiterated Thursday that the central bank is “Strongly Committed” to Lowering Inflation, as he spoke on monetary policy the second day before Congress. He also noted that a recession is a “likelihood,” a fear that continues to weigh on Wall Street.
“Certainly, we are heading into a recession. How severe that recession is remains to be seen,” said Nick Giacoumaakis, president of NEIRG Wealth Management.
UBS raised the odds of a recession to 69%, becoming the latest investment bank to see increased bearish risk. Citigroup and Goldman Sachs also raised their bearish risk appetite this week.
“We are now watching for any further downside follow-up or whether we have reached a local peak and resumed some growth momentum in hard data,” UBS said in a note on Thursday.
On the other hand, a top strategist at JP Morgan said on Thursday that he has confidence in the US economy. will completely dodge the recessionWith the stock market making back any losses in the back half of the year.
Stocks fluctuated in an attempt to rebound from recent bear market lows. Still, key averages are set for a positive week, with the Dow rising 1.7%, the S&P 500 2.4% and the Nasdaq Composite up 2.9% from the week to date.
Labor Department said on Thursday US weekly jobless claims The seasonally adjusted 229,000 fell 2,000 for the week ended June 18, indicating that the labor market remains tight.