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Nasdaq100 – Overall looking great for CURRENCYCOM:US100 by mustaqim.mazuky

Wall Street stocks were mixed on Thursday as traders mulled a stronger-than-expected jobless claims number alongside President Joe Biden’s additional federal spending plan.

Jobless claims fell to 406k for the week ending 21st May, compared to a baseline forecast of 425k. This also marks the lowest reading since the pandemic, underscoring a healthy recovery in the labor market.

The Russell 2000 index surged over 1% as the return of Reddit-obsessed day traders fueled another round of speculative activity in the small- to mid-cap stocks. AMC Entertainment soared 35% on Thursday, marking a week-to-day gain of nearly 120%. The so-called ‘short squeeze’ strategy at play here aims to force call option sellers to cut losses quickly by buying back stocks in the market, resulting in an unusual rally in stock prices.

The Nasdaq 100 index retreated 0.33% however, as rising longer-dated Treasury yields dented the appeal of the tech-centric benchmark. The 10-year rate climbed for a second day to 1.608%, as investors speculate that yields may have more room to go up with rising inflation and a widening fiscal deficit if the Biden administration can push through additional fiscal spending.

US 1Q GDP came largely in line with expectation at 6.4%, but durable goods orders missed forecasts by a wide margin. This is mainly due to a chip shortage that disrupted auto production.

Looking ahead, traders will keep a close eye on Friday’s core PCE inflation data for clues about rising price levels and their ramifications for the Fed’s policy outlook. The figure is expected to come in at 2.9% – the highest level since 1992 partly due to a low-base effect. Concerns surrounding inflation overshoot render the market vulnerable to heightened volatility if actual numbers deviate too far from baseline forecasts

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