On August 8, 2024, worldwide stock markets advanced more than 1% after the release of better-than-anticipated U.S. unemployment data, allaying concerns over recession. The dollar firmed; Treasury yields gained. Oil prices and other commodities gained ground on improved sentiment.

On August 8, 2024, the stock market globally turned positive; major indices edged up over 1%. The boost came after new data from the U.S. helped quell concerns about a possible recession. Here’s what happened and why it’s important.

The Labor Department released new numbers showing that unemployment claims fell more than expected. Initial claims for state unemployment benefits dropped 17,000 to 233,000 in the week ending August 3. It was the biggest drop in nearly a year and better than the 240,000 claims economists had predicted.

Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, said this news is encouraging. “It shows that the job market is stronger than we thought, and there aren’t many big layoffs happening,” he said. This good news calmed investors’ nerves following a disappointing jobs report from July, which had caused a global market downturn.

The decline in claims for unemployment benefits was viewed as a sign that the labor market is doing better than thought and counterpointed to earlier reports. This was great news after a tough start to the week, when markets reacted poorly to the July jobs data. On Monday, many investors were forced to sell quickly, sending the Japanese stock market to a dive and causing the S&P 500, a major US index, to fall by 3%.

Thursday, however, was a different story. The Dow Jones Industrial Average, which follows 30 large U.S. companies, climbed 519.74 points, or 1.34%, to 39,283.19. The S&P 500, which gauges 500 of the largest U.S. companies, rose 95.31 points, or 1.83%, to 5,294.81. The Nasdaq Composite, home to many technology stocks, rose 350.88 points, or 2.17%, to 16,546.69.

Not only the U.S., international equities also moved higher. The MSCI World Index, which measures global stocks, rose 8.40 points, or 1.09 percent, to 779.10. Stoxx 600, the wide benchmark that gauges significant European firms, gained marginally by 0.05 percent.

But experts have warned that despite the turn in sentiment, markets could still be volatile. “When markets get a shock and investors start adjusting their positions, there can be jerkiness and uncertainty,” said Wells Fargo strategist Erik Nelson. “We may not just stabilize right away.”.

The U.S. dollar was stronger in currency markets. The dollar index, which measures the value of the dollar against other major currencies like the yen and euro, rose 0.24% to 103.36. Versus the Japanese yen, it rose 0.49% to 147.41, while the euro eased down to $1.09.

Treasury yields, the interest rates on U.S. government bonds, also climbed. The yield on the 10-year Treasury note, a key indicator of long-term interest rates, surged to 4.005%, from 3.967% the previous day. The 30-year bond yield advanced to 4.2919%. The yield on the 2-year note, which often reflects short-term interest rate expectations, came to 4.069%.

Oil prices extended gains in the energy markets: U.S. crude oil climbed 0.84% to $75.86 per barrel, and Brent crude, another important oil benchmark, rose 0.49% to $78.71 per barrel. Prices were driven upward by part supply concerns in the Middle East and rebounded from low levels at the beginning of the week.

One of the haven metals, gold, followed its peers higher. The price of spot gold advanced 1.59% to $2,419.29 per ounce, while that of U.S. gold futures climbed 0.81% to $2,409.80 per ounce.

Positive data out of the US helped raise equities and dampen some fears of an economic slowdown, experts warn still of vigilance in markets that have become sensitive to any new flow of information and probable shifts in economic conditions.

With investors and analysts continuing to track economic indicators closely, the next few days could see further volatility. The fact that global stocks performed well and the dollar was stronger is a sign of optimism, but further market adjustments and global economic conditions are bound to have a bearing on future movements.