US stocks rise on hopes of interest rate cuts

NEW YORK – Wall Street stocks climbed on May 9 as economic data raised hopes that the US central bank is on track for interest rate cuts later in 2024.

The Dow Jones Industrial Average rose 0.9 per cent to 39,387.76, while the broad-based S&P 500 jumped 0.5 per cent to 5,214.08.

The tech-rich Nasdaq Composite Index added 0.3 per cent to 16,346.26.

The gains came after initial jobless claims rose to the highest level since last August, to 231,000 for the week ending May 4.

A higher level of claims – if the trend persists – could be seen as a sign of the labour market cooling down, giving the Federal Reserve impetus to lower interest rates.

Mr Peter Cardillo, of Spartan Capital, said the higher unemployment claims has helped bond markets. US Treasury bond yields, a proxy for interest rates, moved lower.

While rate cuts will depend on subsequent inflation data, he added: “We are seeing some cracks in the labour market and when that happens, that eventually leads to slow economic activity.”

Meanwhile, the Bank of England kept interest rates at a 16-year high but signalled it could cut rates over the summer.

Among companies reporting results, Warner Bros. Discovery closed 3.1 per cent up while Arm Holdings slumped by 2.3 per cent.

Airbnb shares slid by 6.9 per cent.

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