STORY: Stocks rallied on Thursday, closing sharply higher after a drop earlier in the day, led by gains in shares of Tesla, Nvidia and other megacap growth stocks as investors debated whether the worst of a selloff that has dominated Wall Street so far this year may be over.
The Dow finished up a percent and a third. The S&P 500 ended 1.8% higher, while the Nasdaq rose about 2.7% - lifted by a resurgent tech sector.
The rebound comes after a weaker-than-expected private payrolls number for May suggested demand for labor was starting to slow amid higher interest rates set by the Federal Reserve.
Doug Augenthaler is chief portfolio strategist at Palumbo Wealth Management.
"The market is still stuck in the good news/bad news conundrum. We've had some bad economic news, weak employment numbers. And that's perceived as good news because it means that the Fed may not have to push quite as hard on interest rates. Likewise, if we have good news that the economy is a little stronger, that means the Fed may press down harder, and that becomes bad news for the markets. And it's just a continuing trend, that trend we've been seeing for quite a while now."
All eyes are now on the Labor Department's key jobs report due on Friday, with investors looking for fresh signs of how aggressively the Fed may continue to raise rates.
Megacap tech, including all of the so-called FAANG stocks, posted big gains Thursday with beaten-down Meta Platforms and Netflix each rising more than 5%.
Shares of Microsoft ended in the green, even after the tech giant cut its current quarter forecast for profit and revenue, blaming a stronger U.S. dollar amid high inflation.
But not all of tech rallied Thursday, as shares of Hewlett Packard Enterprise slid more than 5% after the company gave a disappointing full-year forecast, citing currency headwinds as Microsoft did, but also blamed its exit from Russia.