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S&P 500 enters bull market as tech rally resumes

An electronic stock board is displayed inside the Yanmar Tokyo building in Tokyo, Japan, on June 1.  (Kiyoshi Ota/Bloomberg)
By Carly Wanna and Isabelle Lee Bloomberg

Technology stocks drove a rally in U.S. equities while bond yields and the dollar fell after data showing U.S. jobless claims surged more than expected last week.

The S&P 500 rose 0.6%, bringing its gains since an October low past 20%, a level commonly referred to as a bull market.

The jump in jobless claims to the highest since October 2021 shows that the labor market, while largely resilient, is starting to show signs of cooling.

That delivered a boost to the tech sector, which has been flagging under speculation the Federal Reserve will keep interest rates higher for longer.

“It’s still at pretty low levels in terms of initial claims. But maybe the fact that it’s perked up on a week-over-week basis gives the Fed a little bit more fodder to pause next week,” Emily Roland, co-chief investment strategist of John Hancock Investment Management, said in an interview at Bloomberg’s New York office.

The tech-heavy Nasdaq 100 added 1.3%, while the Russell 2000 index fell 0.4%, paring its gains for the week to roughly 3%.

Among individual movers, Carvana surged 56% on a forecast for better financial results.

GameStop plunged 18% after firing its chief executive and reporting a sales miss.

And Adobe rose 5.0% on plans to sell a new AI subscription with copyright services.

Oil prices were also lower, weighing on Treasury yields.

Investors are reassessing the trajectory of Fed policy after central banks in Australia and Canada this week unexpectedly raised rates.

However, Evercore ISI’s Krishna Guha said market moves based on those central bank actions should fade.

“The Fed is the price-setter here, the others are the price-takers, and we should not confuse the two,” Guha said. “They are raising rates in part because they think the Fed will hike once more and if they fail to match this they risk FX depreciation.”

In Europe, the Stoxx 600 ended little changed with SBB, the company at the center of Sweden’s property crisis, down 12%.

The group, also known as Samhallsbyggnadsbolaget i Norden, was sent even further into junk territory by S&P Global Ratings, a move that will worsen the already severe funding crunch.

In currencies, the Turkish lira stabilized against the dollar after state lenders began supporting the currency again.

The lira has endured a historic sell-off recently on speculation Turkey might chang its long-held stance of state interventions.

Elsewhere, the yen strengthened after Japan’s economy grew faster than expected in the first quarter.