Dow up 250 points after hitting 2023 intraday high as stocks aim to cap off best month in more than a year

What’s driving markets

The Dow powered higher after the open on Thursday, driven by a more than 8% gain in shares of Salesforce Inc.
CRM,
+7.21%
following a batch of strong quarterly earnings.

But weakness in other megacap technology names such as Nvidia Corp.,
NVDA,
-3.30%
Meta Platforms Inc.
META,
-2.57%
and other members of the “Magnificent Seven,” weighed on both the Nasdaq and S&P 500.

See: Salesforce’s stock rises 9% on strong quarterly earnings

All three major stock benchmarks were on pace for their best month in at least a year, driving higher by falling bond yields, optimism about easing inflation and potential Federal Reserve rate cuts next year.

“I think the market is getting it wrong,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

Instead of the Fed orchestrating a soft landing for the economy as many investors now envision, Schutte expects rates to stay high until a mild recession unfolds. “Eventually, the Fed rate hikes are going to bite, but I don’t think they will remove them until they see them bite, meaning slower economic growth and job losses.”

Investors on Thursday received yet another report showing inflation continued to ease last month. The core personal-consumption-expenditures price index, the Fed’s preferred gauge of inflation, was up 3.5% year-over-year in October, compared with 3.7% in September.

“…[T]his morning’s PCE print underscores that inflationary pressures continue to moderate to the downside, but the question remains if it will be enough for the Fed to declare a final victory,” said Quincy Krosby, chief global strategist for LPL Financial.

MarketWatch Live: Inflation has cooled further, Fed-favored PCE gauge shows

Meanwhile, jobless claims continued to tick higher, offering more evidence that the U.S. labor market is cooling. Initial jobless claims rose 7,000 to 218,000, in the week ending Nov. 25, the Labor Department said Thursday. Economists polled by The Wall Street Journal had estimated new claims would rise 11,000 to 220,000. 

Investors also digested comments from New York Fed President John Williams, who said the central bank has raised interest rates to, or near, their peak.

Oil futures on Thursday turned lower after the Organization of the Petroleum Exporting Countries and it allies, known as OPEC+, reached an agreement to reduce monthly production by an additional 1 million barrels per day, according to media reports.

News of the agreement initially boosted prices, but they quickly erased all of their gains before turning negative.

See: Oil futures gain as OPEC+ reportedly reaches a deal to cut output by an additional 1 million barrels per day

U.S.-traded West Texas Intermediate crude
CL.1,
-1.49%
futures were down 1.1% to $76.95 a barrel. The S&P 500’s energy sector was up 0.3%, shaking off earlier weakness, according to FactSet.

The S&P 500’s worst-performing sectors on Thursday were communications services, information technology and consumer discretionary, all weighed down by weakness in the “Mag 7” names.

Companies in focus

• Snowflake Inc.’s
  SNOW,
  +6.47%
  stock rose Thursday after the company delivered upbeat results and an impressive forecast.

• Pure Storage
  PSTG,
  -13.62%
  shares were lower after the enterprise provider of storage services issued disappointing revenue guidance.

• Tesla Inc.
  TSLA,
  -1.72%
  shares were lower, with the company scheduled to host its Cybertruck delivery event on Thursday in Austin, Texas.

See: Elon Musk lashes out at advertisers who boycott X: ‘Go f— yourself’

—Jamie Chisholm contributed reporting to this article