Wall Street closed higher on Thursday in a late-week relief rally. Dovish comments from an important Fed official sparked the rally. Treasury yields continued to soar, with the 2-year treasury yield briefly touching a fresh 15-year high. All three major indexes ended in the green.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) jumped 1.1%, or 341.73 points to close at 33,003.57. Twenty-four components of the 30-stock index ended in positive territory, while six ended in negative.

The S&P 500 rose 0.8% or 29.96 points to close at 3,981.35. Nine of the 11 broad sectors of the benchmark index ended in positive territory. The Utilities Select Sector SPDR (XLU), the Consumer Staples Select Sector SPDR (XLP) and the Real Estate Select Sector SPDR (XLRE) gained 1.9%, 1.4% and 1.3%, respectively, while the Financials Select Sector SPDR (XLF) declined 0.5%.

The tech-heavy Nasdaq advanced 0.7% or 83.50 points to finish at 11,462.98.

The fear-gauge CBOE Volatility Index (VIX) was down 4.8% to 19.59. A total of 11.2 billion shares were traded on Thursday, lower than the last 20-session average of 11.5 billion. Advancers outnumbered decliners on the NYSE by a 1.19-to-1 ratio. On Nasdaq, a 1.10-to-1 ratio favored advancing issues.

Bostic’s Comments Drive Markets

Earlier in the session, stocks had gone under with the release of jobless claims numbers for the week, as they continued to show a resilient labor market. However, dovish comments coming in from Atlanta Fed President Raphael Bostic sparked a significant turnaround from the recent broad sell-off.

Bostic said on Thursday that the central bank might be in a position to pause the current tightening cycle by mid to late summer. He said that he expects a 25 bps rate hike in March but also warned that the Fed would be carefully monitoring incoming data in the interim and adjust its interest rate outlook if inflation and labor market numbers continue to stay strong.

Bostic went on to say that risks are now roughly balanced, but there is still a “long way to go.” His comments came in as a relief to market participants who had, in recent sessions, looked to price in a possible 50 bps rate hike from the March meet. But now, with clear signals emerging from the Fed that it is going to be a 25 bps one, the market looked to rebound on Thursday.

Consequently, shares of Intel Corporation (INTC Quick QuoteINTC - Free Report) and Microsoft Corporation (MSFT Quick QuoteMSFT - Free Report) gained 3.4% and 2%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

2-Year Treasury Yield Touches a Fresh 15-Year High

The benchmark U.S. 10-year treasury yield remained above the 4% mark for the second session in a row, with fresh jobless claims numbers showing that the labor market remains robust. It hit a four-month high of 4.091%, before settling down 6.7 basis points up at 4.064%.

The 2-year U.S. Treasury yield, more significantly, ended the day 0.4 basis points down at 4.885%, after earlier touching a fresh 15-year high at 4.944%.

Economic Data

The Labor Department said on Thursday that initial jobless claims fell to 190,000, decreasing 2,000 for the week ending Feb 25, from the previous week's unrevised level of 192,000. The four-week moving average increased to 193,000, marking a rise of 1,750 from the previous week’s unrevised average of 191,250.

Continuing claims came in at 1,655 ,000 for the week ending Feb 18, decreasing 5,000 from the previous week’s revised level. The previous week's numbers were revised up by 6,000 from 1,654,000 to 1,660,000. The 4-week moving average came in at 1,671,500, an increase of 1,250 from the previous week's revised average. The previous week's average was revised up by 1,500 from 1,668,750 to 1,670,250.

The U.S. Bureau of Labor Statistics reported that nonfarm business sector labor productivity increased 1.7% in the fourth quarter of 2022, and unit labor costs increased 3.2%.