Stock market news live updates: Stocks rise to record highs after jobless claims hit pandemic-era low

Stocks gained Thursday as investors awaited more labor market data, which will serve as crucial information in determining the path forward for the monetary policies underpinning risk assets over the past year.

Ahead of a key monthly report on job gains, a new print on weekly unemployment claims came in lower than expected, underscoring further improvements in the economic recovery.

The S&P 500 advanced to an all-time high. The Nasdaq also rose to set a fresh intraday record before paring some gains during the afternoon session.

The indexes' latest march to record highs has been powered by technology stocks, with the Nasdaq extending a run of outperformance from August. This has in turn signaled investors' concerns over the status of the economic recovery given the Delta variant's spread, with growth and technology stocks seen as more of a defensive trade amid a coronavirus resurgence.

For cyclical stocks like energy and travel shares to keep pace, "We've got to see a rollover in COVID case counts," Jeffrey Kleintop, Charles Schwab chief global investment strategist, told Yahoo Finance. "We've seen that in some states that seem to be leading the trends, and some countries as well, but I think we're really dependent on case counts coming down and renewed confidence in that reopening, and travel and the service sector continuing to show growth."

New economic data on Wednesday appeared to vindicate market participants' concerns over a slowing recovery. ADP's closely watched monthly payrolls report showed that just 374,000 private payrolls returned in August, sharply missing estimates for 625,000. And Friday's officials jobs report from the Labor Department is expected to show a deceleration in non-farm payrolls gains, with these likely rising by 725,000 for August after jumping by 943,000 in July.

"The private payrolls numbers have been all over the map during the pandemic," Mike Loewengart, managing director of investor strategy at E-Trade Financial, wrote in an email on Wednesday. "But with so much pressure on improvement on the labor market front coming from the Fed, this could send a signal that jobs growth is stagnating. That’s likely a good thing for the markets, though, as it means easy money policy continues."

Namely, many Federal Open Market Committee members have signaled they are inclined to look especially closely at labor market data to determine when to start tapering their massive crisis-era asset purchase program. The August jobs report will be the final monthly government employment data the Fed receives before its next policy-setting meeting in late September, showing whether the economy has managed to come close to fully recuperating the jobs lost during the pandemic.

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4:03 p.m. ET: Stocks end slightly higher before August jobs report; S&P 500 and Nasdaq eke out record highs

Here were the main moves in markets as of 4:03 p.m. ET:

• S&P 500 (^GSPC): +12.86 (+0.28%) to 4,536.95

• Dow (^DJI): +131.35 (+0.37%) to 35,443.88

• Nasdaq (^IXIC): +21.80 (+0.14%) to 15,331.18

• Crude (CL=F): +$1.13 (+1.65%) to $69.72 a barrel

• Gold (GC=F): -$3.60 (-0.20%) to $1,812.40 per ounce

• 10-year Treasury (^TNX): -0.8 bps to yield 1.2940%

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3:30 p.m. ET: U.S. equity gains could slow from here: Strategist

With much of the economic recovery now priced into the market, further gains for domestic stocks could be harder to come by, according to at least one strategist.

“In the coming 12 months, we could justify a 7.7% [S&P 500] price appreciation,” Sam Stovall, CFRA Research's chief investment strategist, told Yahoo Finance. “Some people would say, ‘Well, gee, why is it so low because we've seen such a strong gain over the last year?' And our feeling is because we are getting into the area in which the expectations for tapering are to take hold."

"We think that the Fed will taper by the end of this year," he added. "Also as we head into the second year of a president's term in office, the second and third quarters are typically negative. So I believe that we could end up seeing more pressure and more headwinds as we move into the coming year.”

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9:42 a.m. ET: Are the markets due for a correction? Not necessarily, according to one strategist

Given that markets are trading at all-time highs and have not seen a 5% correction since last October, many investors have started to wonder whether a pullback is on the horizon. According to at least one strategist, these concerns may be overblown.

"We’re not necessarily due for anything just because it’s a certain time in the calendar, [or] it hasn't happened for a certain amount of time," Liz Young, SoFi head of investment strategy, told Yahoo Finance Live on Thursday. "But what you do have to look at going into fall is that there is that proverbial 'wall of worry' that we're going to have to climb."

"I think we're going to climb it just fine, it's more about, are there investors in the market that are going to be able to withstand some of that worry, things they haven't maybe seen before, things that are going to happen in Washington ... and there's a lot of newer investors in the market," she added. "So I hope they're ready to withstand some of those question marks."

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9:30 a.m. ET: Stocks open at record highs

The S&P 500 and Nasdaq set fresh all-time highs Thursday morning, with a better-than-expected report on weekly unemployment claims helping power equities higher. The Dow added more than 100 points, or 0.4%, and the small-cap Russell 2000 gained 0.6%.

The risk rally extended to other assets as well, with crude oil prices gaining more than 1.5%. Gold slipped, and the 10-year Treasury yield fell by 1 basis point to reach 1.292%.

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8:45 a.m. ET: Jobless claims reach new pandemic-era low

Initial unemployment filings reached the lowest level since March 2020 last week, improving further as fewer Americans were put out of work amid rising labor demand.

Weekly jobless claims came in at 340,000 during the week ended August 28. This compared to 345,000 consensus economists were expecting, according to Bloomberg data. During the previous week, claims were at 354,000.

Continuing claims for regular state programs also reached the lowest since March 2020, coming in at 2.748 million. As of the week ended Aug. 14, about 12.2 million Americans were claiming benefits of all forms, including both regular state and enhanced federal unemployment benefits. That marked an increase of nearly 179,000 versus the previous period, though the overall trend over the past several months has been decreasing.

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7:21 a.m. ET Thursday: Stock futures rise

Here's where markets were trading before the opening bell:

• S&P 500 futures (ES=F): +8.25 points (+0.18%) at 4,529.5

• Dow futures (YM=F): +58 points (+0.16%) to 35,348.00

• Nasdaq futures (NQ=F): +33.5 points (+0.21%) to 15,642.75

• Crude (CL=F): +$0.40 (+0.58%) to $68.99 a barrel

• Gold (GC=F): +$1.60 (+0.09%) to $1,817.60 per ounce

• 10-year Treasury (^TNX): -1.5 bps to yield 1.287%

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6:01 p.m. ET Wednesday: Stock futures open flat

Here were the main moves as the overnight session kicked off Wednesday evening:

• S&P 500 futures (ES=F): +1.25 points (+0.03%) at 4,522.5

• Dow futures (YM=F): -2 points (-0.01%) to 35,288.00

• Nasdaq futures (NQ=F): +3.75 points (+0.02%) to 15,613.00

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck