U.S. Stocks Climb as Surprise Drop in Jobless Claims Boosts Tech Sector

U.S. stocks advanced on Thursday, with the technology sector leading the way, after government data showed an unexpected fall in weekly applications for unemployment benefits. The report suggested underlying strength in the labor market, boosting investor sentiment following the Federal Reserve's recent interest rate decision.

Market Performance

The three major U.S. indices finished the session with solid gains. The tech-heavy Nasdaq Composite was the top performer, rising 1.69%. The broader S&P 500 added 1.14%, while the Dow Jones Industrial Average climbed 0.61%.

Semiconductor stocks were among the day's biggest winners, with Intel (INTC) surging more than 7.6%. Other chipmakers also rallied, as AMD (AMD) gained 6% and Nvidia (NVDA) rose 2.5%. European markets also closed broadly higher, with the Stoxx 50 index gaining 0.92%.

Economic Data Points to Tight Labor Market

The primary catalyst for the market's move was a report from the U.S. Department of Labor. Initial jobless claims for the week ended Sept. 12 fell by 10,000 to a seasonally adjusted 196,000. This figure was well below economists' consensus forecast of 208,000.

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The source noted that the unexpected decline could reflect data volatility around the recent Labor Day holiday. Still, the data points to a persistently tight labor market, which could support consumer spending but also keep pressure on the Federal Reserve to maintain its firm monetary policy stance.

Contrasting Signals from Housing Sector

While the labor market showed resilience, other data revealed continued stress in the housing sector. According to a government report, U.S. housing starts unexpectedly fell 2.6% in August to an annualized rate of 1.28 million units, driven by a sharp decline in multi-family projects.

Separately, Fannie Mae reported that the average rate on a 30-year fixed mortgage climbed to 6.95%, its fourth consecutive weekly increase. Rising borrowing costs continue to present a significant headwind for the real estate market and prospective homebuyers.