Stock Market Today: Stocks Rally as Recession Fears Ease
Initial jobless claims fell more than expected last week, which helped calm fears of a slowing labor market.


Joey Solitro
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.
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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."
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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
- Joey SolitroContributor
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