What’s happening: The Dow Jones index closed lower on Thursday after investors digested weekly data on the US labour market.
What happened: The US Labor Department reported yesterday that around 1.5 million people had applied for unemployment benefits in the latest week.
Jobless claims dropped for the tenth straight week in the seven days ending June 13. Despite this, investors focused on the numbers coming in higher than the consensus view and a deceleration in the pace of decline last week.
Markets also fretted over rising infections and hospitalisations in various US states. The Dow Jones index declined for the second consecutive session, although the other major indices recorded some gains in trading on Thursday.
Why it matters: With 1.5 million new applications for jobless claims in the most recent week, the total number of claims in the US have climbed past 48 million during the pandemic. Continuing claims came in at 20.54 million, versus the previous reading of 20.61 million.
While the Labor Department’s report was in focus yesterday, other data from the US showed signs of the economy improving. The Philadelphia Fed manufacturing index spiked to 27.5 in June, rebounding from -43.1 in the previous month. The figure was significantly better than the expectations of a negative 20 reading.
Fears were also fanned by news of rising cases in the US, with Texas, Arizona and Florida reporting high new infections. Florida confirmed over 2,600 new cases, while Arizona reported more than 1,800. Despite this, several local governments are continuing with their reopening plans.
After losing 170 points on Wednesday, the Dow Jones index shed another 39.51 points to close at 26,080.10 on Thursday, with shares of Goldman Sachs and American Express declining. The S&P 500 and Nasdaq 100 held up, with gains of 1.85 points and 32.52 points, respectively, driven by energy and consumer staples shares.
The 10-year Treasury note yield declined 2.6 basis points at 0.707% on Thursday. August gold slipped 0.3% to finish at $1,731.10 an ounce, while US crude gained 2.3% to reach $38.84 per barrel in the previous session.
What to watch: Markets await the US current account report and speeches from various Federal Reserve members. The current account deficit, which contracted by $15.6 billion to $109.8 billion in the fourth quarter, is expected to shrink further to $103 billion in the first quarter.
Investors continue to assess the coronavirus numbers, with total cases surging close to 8.5 million globally. The US has so far reported more than 2,191,050 cases and around 118,430 deaths.