U.S. Stocks Pull Back Off Early Highs But Holding On To Notable Gains

Stocks moved sharply higher in early trading on Thursday but have given back ground over the course of the session. Although the major averages have pulled back well off their highs of the session, they continue to post notable gains.

After surging as much as 2.6 percent, the tech-heavy Nasdaq is up 179.80 points or 0.8 percent at 22,744.03. The S&P 500 is up 42.90 points or 0.7 percent at 6,685.06 and the Dow is up 269.03 points or 0.6 percent at 46,407.80.

The early rally on Wall Street came amid a positive reaction to highly anticipated earnings news from market leader and AI darling Nvidia (NVDA).

Shares of Nvidia have pulled back well off their highs but remain up by 1.5 percent after the chipmaker reported better than expected third quarter results and provided upbeat guidance.

The strong results from Nvidia helped offset recent concerns about a potential AI bubble that have weighed on the markets over the past several sessions.

"Nvidia's results had the potential to be a make-or-break moment for global financial markets," said Dan Coatsworth, head of markets at AJ Bell. "Any disappointment could have fuelled concerns around an AI bubble poised to burst."

"Fortunately, Nvidia has brought the party back to life, with suggestions that everything is hunky dory with all things AI," he added. "Demand for its products remains strong, and chief executive Jensen Huang continues to talk up AI like it's the best thing since sliced bread."

Meanwhile, traders are also digesting the Labor Department's long-delayed report on employment in the month of September.

The report showed employment in the U.S. increased by much more than expected in September, although the unemployment rate also unexpectedly crept higher.

The Labor Department said non-farm payroll employment jumped by 119,000 jobs in September after a revised dip of 4,000 jobs in August.

Economists had expected employment to rise by 50,000 jobs compared to the addition of 22,000 jobs originally reported for the previous month.

At the same time, the report said the unemployment rate crept up to 4.4 percent in September from 4.3 percent in August. The unemployment rate was expected to remain unchanged.

The mixed data may have added to recent uncertainty about the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting in December.

Sector News

Biotechnology stocks are turning in some of the market's best performances on the day, with the NYSE Arca Biotechnology Index surging by 2.0 percent to a record intraday high.

Significant strength is also visible among natural gas stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Natural Gas Index.

Banking, networking and oil stocks are also seeing notable strength, while computer hardware stocks are seeing continued weakness, dragging the NYSE Arca Computer Hardware Index down by 3.0 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged by 2.7 percent and South Korea's Kospi jumped by 1.9 percent, although China's Shanghai Composite Index bucked the uptrend and fell by 0.4 percent.

The major European markets have also moved to the upside on the day. While t he German DAX Index is up by 0.9 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

In the bond market, treasuries have moved higher in reaction to the unexpected uptick by the unemployment rate. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 4.104 percent.

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