A blowout quarterly earnings report from the computer chip giant Nvidia, a strong showing from Walmart and a better than expected September jobs report sent stocks surging early Thursday, as investors’ saw fresh signs that the U.S. economy could prove resilient in the face of gathering headwinds.
The S&P 500, a broad measure of stocks, gained 1.5% as trading opened. The tech-heavy Nasdaq jumped 2%, but later backed down slightly from its high. The Dow Jones Industrial Average rallied 600 points, around 0.8%.
Stocks had been showing signs of flagging in recent weeks, amid rising questions about how much room the artificial intelligence boom had to run after powering markets through a year of steady gains.
Nvidia has been at the heart of that boom. Its earnings report Wednesday exceeded investor forecasts, and suggested there is still plenty of room for growth in AI.
Walmart, the world’s largest retailer and America’s biggest private employer, is widely viewed as a bellwether for U.S. retail and consumer sentiment. So when the company raised its full-year earnings and sales outlook Thursday, investors saw another good sign.
A third factor driving stocks up was data in the long-delayed September jobs report, which showed that the U.S. had added 119,000 jobs in September, a much larger figure than forecast.
Although the unemployment rate ticked up from 4.3% in August to 4.4%, approximately 450,000 workers entered the labor force. Economists view this as evidence that job opportunities are still plentiful, despite a wave of corporate layoffs.
Just prior to the release of Thursday’s jobs report by the Bureau of Labor Statistics, Verizon told employees it planned to lay off 13,000 employees, or approximately 13% of its entire workforce.
The company joined a suite of other blue-chip employers that say they plan to eliminate tens of thousands of jobs, including Amazon, General Motors, IBM, Microsoft, Paramount, Target and UPS.
The jobs report, which captured conditions before the government shutdown as well more recent jobs data, suggested a more mixed picture for the U.S. economy.
Manufacturing shed 6,000 jobs, continuing a trend in a sector the Trump administration has touted as a key target of its economic policies. Transportation and warehousing also saw job losses totaling 25,300. Wage growth slowed, and job totals for July and August were revised downward.
The employment gains in September were concentrated in the health care, hospitality and social assistance sectors.
Eyes now turn to the Federal Reserve, which will announce its next interest-rate decision on Dec. 10.
Following Thursday’s mixed September jobs report, odds of a rate cut in December increased among traders. This would provide a continued boost to the economy by making it cheaper to borrow money, spurring overall consumption and likely even more gains in the stock market.