Market Snapshot: U.S. stocks trim gains in midday trade as investors assess jobless claims, await monthly employment report

What’s driving markets

U.S. stocks trimmed earlier gains in midday trade on Thursday after investors briefly shrugged off concerns about further interest-rate rises from the Federal Reserve. The three major indexes wavered between gains and losses after trading modestly higher after the open as the latest weekly jobless claims data showed an unexpectedly large uptick in the number of Americans filing for unemployment benefits.

The number of Americans who applied for unemployment benefits in early March jumped to a 10-week high of 211,000, the highest level since Christmas. That’s higher than the 195,000 new applicants that economists polled by the Wall Street Journal had anticipated.

Economists said the data suggest that the labor market might be starting to slow, which is seen as a necessary prerequisite for driving inflation back to the Fed’s 2% target.

“The labor market might just be on the cusp of an inflection point,” said Peter Boockvar, chief investment officer of Bleakley Financial Group, in emailed commentary.

Investors are now looking ahead to Friday’s closely watched February jobs report from the Department of Labor. Economists polled by the Wall Street Journal expect 225,000 jobs were created last month after 517,000 new jobs were created in January, a number that was much higher than economists had anticipated.

See: Wall Street sees smaller 225,000 increase in U.S. jobs in February. A much larger gain might spur stiffer Fed rate hike.

Treasury yields ticked lower, but short-term yields remained near 15-year highs. The yield on the 2-year note TMUBMUSD02Y, 4.943% declined by 9 basis points to 4.969%.

Stocks suffered earlier in the week as Powell said during testimony on Capitol Hill that rates would likely need to rise even further than market participants had expected. However, the main indexes saw some relief after the Fed chief clarified that policymakers hadn’t yet decided on the size of the next rate hike.

Investors have already digested several reports on the labor market this week, including a report on the number of job openings, which showed that the number of Americans quitting their jobs had fallen below 4 million in January for the first time in 19 months.

“The big picture is that the labor market is easing, but it’s still tighter than it was before the pandemic,” said Sonu Varghese, a global macro strategist at Carson Group.

See: Bad economic data won’t be good for stocks, but good data will be even worse, this JPMorgan technical strategist says

Companies in focus

• Uber Technologies Inc. UBER, -2.35% shares dropped 1% on Thursday after Bloomberg reported on Wednesday that the ride-hailing food and package delivery company was considering a spinoff of its struggling Uber Freight business. An Uber spokesman did not immediately return a request for comment.
• Silvergate Capital Corp. SI, -26.07% shares slumped 18.5% after the La Jolla. Calif-based lender said it would wind down operations and liquidate its crypto-friendly lender Silvergate Bank. Silvergate shares could hit a record low on Thursday if those losses hold through the regular trading session, according to Dow Jones Market Data.
• Credit Suisse Group AG’s U.S-listed shares CS, -3.10% fell 2.1% after the Swiss bank said publication of its annual report for 2022 would be delayed due to a late call from the Securities and Exchange Commission, which questioned its 2019 and 2020 cash-flow statements.
• General Motors Co. GM, -3.45% slipped 2.5% after the automaker announced a voluntary buyout program that’s expected to lead to an employee separation charge of $1.5 billion.

— Jamie Chisholm contributed to this article