Stocks jumped out of the gate and stayed there through the close. Today's upside came courtesy of bargain hunters and an encouraging update on the labor market. A round of well-received earnings reports also boosted sentiment.
Market volatility has ramped up over the past week as disappointing economic data reignited recession chatter – and sparked concerns the Federal Reserve waited too long to cut interest rates. Indeed, losses for the main indexes ranged from 5% to 8% between the July 31 and August 7 closes.
Today, though, the Dow Jones Industrial Average gained 1.8% to 39,446, the S&P 500 rose 2.3% to 5,319, and the Nasdaq Composite added 2.9% to 16,660.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In economic news, data from the Department of Labor showed initial jobless claims fell by 17,000 last week to 233,000, more than economists were expecting.
The July jobs report signaled a notable slowdown in hiring last month, so today's report "helps to calm fears about the health of the labor market," says Skyler Weinand, chief investment officer at Regan Capital. "Just because the labor market is cooling off doesn't mean we're entering into a recession."
Palantir builds on weekly gain
In single-stock news, Palantir Technologies (PLTR) had another strong session, surging 11.3% on news the data analytics firm teamed up with Microsoft (MSFT, +1.1%). The partnership will have the two tech companies selling secure cloud, analytics and artificial intelligence (AI) capabilities to the U.S. government.
In its most recent earnings report, Palantir said its government contracts accounted for more than 40% of its total revenue. The print, which was released Monday evening, sent PLTR up 10% in Tuesday's session. And with today's gain, the tech stock is up more than 18% for the week to date.
Weight-loss drugs fuel Q2 beat for Eli Lilly
As for today's earnings news, Eli Lilly (LLY) stock surged 9.5% after the pharmaceutical giant beat top- and bottom-line expectations for its second quarter, driven by demand for its weight-loss drugs. LLY also raised its full-year forecast.
Jefferies analyst Akash Tewari (Buy) says the company's GLP-1 drugs make LLY a "must-own" stock, and that its next-generation combination treatments "could lead to the greatest period of revenue and earnings-per-share growth in pharma history."
Robinhood, Klaviyo gain after earnings
Elsewhere, Robinhood Markets (HOOD) stock gained 3.6% after the online brokerage platform reported record quarterly earnings and revenue results for Q2. But that wasn't all.
"There was a lot to like about HOOD's Q2 including a record $13 billion net deposits," says Mizuho Securities analyst Dan Dolev (Outperform, the equivalent of Buy). "Despite already strong momentum, HOOD is still in its early stages of disrupting the brokerage industry and has plenty of runway from here."
Meanwhile, Klaviyo (KVYO) stock soared 33.4% after the software-as-a-service marketing platform disclosed higher-than-expected top- and bottom-line results for its second quarter and raised its full-year forecast.
Klaviyo's "huge beat … reflects strong execution and growth opportunity," says Mizuho Securities analyst Siti Panigrahi (Outperform). "In the current macro environment, we believe KVYO estimates are derisked for 2024 and 2025 and current levels offer an attractive entry point for KVYO shares."
Related content
- The Fed Is About to Cut Rates. What Should Investors Do?
- The 1031 Exchange Rules You Need to Know
- Kiplinger's Economic Calendar for This Week
-
Affordability Crisis: Florida Votes to Increase Property Tax BreakState Tax Property taxes have skyrocketed nearly 60% within the last five years in Florida, and its constituents are finally doing something about it.
-
Average Net Worth by Age: How Do You Measure Up?Financial advisors discuss the secrets to growing your net worth over time.
-
Three Charitable Giving Strategies for High-Net-Worth IndividualsIf you have $1 million or more saved for retirement, these charitable giving strategies can help you give efficiently and save on taxes.
-
The Wealth-Building Powers of Health Savings Accounts (HSAs)Health savings accounts could be the most underutilized wealth-building tool out there. Here’s who should use them and how to maximize their benefits.
-
Seven Ways to Be an Absolute Jerk as a LawyerHere's what law students need to know about damaging their relationships with other lawyers and judges and running up the bill for clients.
-
Stock Market Today: Stocks Are Positively Mixed to Open DecemberTechnology led the way Monday as two of the three main equity indexes closed higher.
-
The Best Retail Stocks to Buy This Holiday SeasonE-commerce is a growing trend, but most folks still prefer to shop in stores. That makes these dominant retail stocks worth a closer look.
-
One Good Way to Withdraw Retirement Assets (and a Bad One)Don't withdraw retirement assets haphazardly. Managing distributions intentionally can lower your taxes, conserve your wealth and reduce Medicare premiums.
-
What Is Capital Gains Tax Deferral?Spoiler alert: It's the secret weapon of savvy real estate investors. Here's how it works and details about the tools you need to do it.
-
Don't Leave Your Heirs an IRA Tax BombYour traditional IRA has served you well, but when your heirs inherit it, watch out. Consider some of these strategies to minimize their tax burdens.
