Indexes rally on China stimulus, promising labor-market data

• Indexes rallied Thursday on positive jobs data and promises of further economic stimulus in China.

• Jobless claims fell 4,000 to a four-month low of 218,000, beating estimates of a mild increase.

• Traders will be closely watching personal consumption expenditure data out Friday.

US stocks rallied on Thursday, fueled by China stimulus measures and positive jobs data to pare losses from yesterday.

The indexes rallied after leaders in China pledged to support the economy with more strong policy measures.

That sentiment comes just days after the country unveiled a series of stimulus measures in a rare move to prop up the country’s sluggish economy, which is plagued by weak domestic demand and a struggling property sector.

The indexes’ gains were also fueled by positive labor market data. Jobless claims fell unexpectedly last week, down 4,000 to a four-month low of 218,000, according to Labor Department data released Thursday.

Those claims mark two weeks of straight declines, and came in significantly lower than economists’ forecasts of a rise to 225,000.

Meanwhile, second-quarter GDP came in unrevised at a 3% annualized rate, according to data released Thursday. First quarter growth was revised up to 1.6% from 1.4%.

That positive data will likely give markets more confidence in the underlying strength of the US economy as traders continue to expect a series of rapid rate cuts over the next year.

Markets are pricing in a 52% chance of another jumbo 50 basis-point-rate cut from the Federal Reserve in November, according to the CME FedWatch tool.

On Friday traders will be focused on new personal consumption expenditure data, the Fed’s preferred inflation gauge.

Here’s where US indexes stood at 10:10 a.m. on Thursday:

Here’s what else is going on today:

• Benard Arnault added $6 billion to his net worth in a day after China’s stimulus sparked a rally in luxury stocks.

• Hedge fund manager Eric Jackson believes we may be in for an “everything rally” as stocks mirror the early days of one of history’s biggest bull markets

• The US personal savings rate, a key US consumer indicator, has dipped to “crisis levels,” SocGen says

In commodities, bonds, and crypto:

• Oil futures fell. WTI crude dipped 3.29% to $67.32 a barrel. Brent crude, the international benchmark, fell 3.13% to $71.13 a barrel.

• Gold was up 0.01% to $2,685 per ounce.

• The 10-year Treasury yield rose six basis points to 3.794%.

• Bitcoin rose 0.31% to $57,745.72

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