Stocks climbed Thursday after new labor market data boosted investors' confidence in the U.S. economy following a sharp market sell-off earlier in the week.

The S&P 500 advanced 2.3%, closing at 5,319.31 and posting its best day since November 2022. The Dow Jones Industrial Average surged 683.04 points, or 1.76%, to 39,446.49. The Nasdaq Composite added 2.87%, ending at 16,660.02.

Pharmaceutical giant Eli Lilly surged 9.5% after posting better-than-expected earnings and raising its full-year outlook on strong demand for diabetes treatment Mounjaro and obesity drug Zepbound. The momentum names which suffered the most Monday bounced back Thursday. Chipmakers Nvidia and Broadcom both jumped by more than 6%. Meta Platforms climbed 4.2%, and Apple ticked up about 1.7%.

The latest weekly jobless claims came in below forecasts, helping to allay some recent concerns on the strength of the labor market. First-time filings for jobless benefits came in at 233,000 last week, down 17,000 from the previous week and lower than the Dow Jones estimate for 240,000, the Labor Department reported Thursday.

The 10-year Treasury yield hit 4% following the jobless claims data, a level seen before the disappointing July jobs report Friday sent markets reeling.

Also aiding markets Thursday was a weaker Japanese yen versus the U.S. dollar. A yen surge that caused the unwinding of a popular so-called carry trade with hedge funds was a main culprit cited for Monday's stock drop.

"This is the bounce people were waiting for. So now what we've learned is we're not going to bounce just for bouncing's sake. We need good news in order to move forward and in order to prove that the rally is durable," SoFi head of investment strategy Liz Young Thomas told CNBC's "Closing Bell" on Thursday.

On the rally following the fresh jobless claims numbers, Young said that indicates the market is "even more sensitive to all of the data that's coming in, which also tells me that we're going to see more volatility as we get data that might conflict."

The major averages are still lower week to date but have recovered much of their losses from Monday's rout. The S&P 500 is down 0.5% for the week, while the Dow and Nasdaq are lower by around 0.7% each.

Stocks close higher Thursday

U.S. stocks ended Thursday's session higher.

The S&P 500 advanced 2.3%, its biggest daily gain since November 2022, to finish at 5,319.31. The Dow Jones Industrial Average gained 683.04 points, or 1.76%, to end at 39,446.49. The Nasdaq Composite added 2.87% to close at 16,660.02.

— Hakyung Kim

Too early to call a recession, says Societe Generale

Investors shouldn't become pessimistic yet on the U.S. economy despite this week's market volatility stemming from rising concerns of a hard landing, says Societe Generale.

"The largest moves of the last week happened in Japan and Technology, suggesting that Tech valuation and carry-trade reversals are a more convincing explanation for the volatility than the rising probability of a U.S. recession," head of Asia equity strategy and multi asset strategist Frank Benzimra wrote in a Thursday note.

If the U.S. does avoid a recession, that combined with monetary policy easing will benefit Chinese and Hong Kong equities, Benzimra added. recessions since

— Hakyung Kim

Airline stocks are outperforming during Thursday's rally

Airline stocks were outperforming during Thursday's market rally, a sign that investors may be more comfortable with the state of the economy after a better-than-expected jobless claims number.

The U.S. Global Jets ETF (JETS) was up about 3% in afternoon trading, a bigger gain than the three major averages. The fund was down nearly 12% for the month entering the day.

American Airlines and Delta Air Lines were helping to fuel the gains for the ETF, gaining more than 4% each.

— Jesse Pound

Retailers caught in the crosscurrents

The outlook for many retail stocks is getting murky as two crosscurrents play out, according to Citi analyst Steven Zaccone. On one hand, expected rate cuts in the second half of the year could spur demand. However, those rate cuts are coming because the economy is perceived to be weakening. The question becomes: which trend wins out?

Zaccone said he's anticipating retailers will be increasingly likely to cut their fiscal year estimates in order to account for a potential slowing in second half sales. "It remains to be seen whether these guidance cuts will be rewarded," he said.

With this in mind, Citi says it's best for investors to stick with best-in-class defensive retailers, retailers with exposure to growth or those that have cyclical exposure, and cited Best Buy, Home Depot and O'Reilly Automotive as examples.

—Christina Cheddar Berk

Information technology sector pops more than 3%, leads S&P 500 higher

Information technology was the best-performing sector in the S&P 500, rising 3.5% during afternoon trading.

Monolithic Power Systems was the biggest gainer in the sector, surging more than 9%. On Semiconductor and KLA Corp jumped more than 7% each. Broadcom, Micron Technology and Teradyne all added at least 6%.

Communication services was the second-best performing sector, rising 2.5%. Meta Platforms and Netflix led the sector higher, rallying more than 3% each. Alphabet rallied more than 2%.

Health care, industrials and consumer discretionary also rose at least 2%.

— Samantha Subin

Labor market is weaker than 4.3% unemployment rate implies, Piper Sandler says

The rise in unemployment to 4.3% last week spooked many investors and spurred debate about whether the level had hit the point of being a recession signal.

However, that official jobless rate could be a too-optimistic way of looking at the labor market, according to Piper Sandler chief global economist Nancy Lazar.

"Here we double-check it against unrelated labor metrics. They all say the official unemployment rate actually understates job market weakness," Lazar said in a note to clients.

The other metrics include a steady rise in continuing jobs — which hit 1.875 million last week, even as initial claims fell — a New York Fed consumer survey about the labor market, and the slumping quit rate in the JOLTS report.

"The quit rate ... points to 5%+ unemployment -- it always goes down in a recession," the note said.

— Jesse Pound

The 'great moderation' has ended, says Strategas

Investors should get used to the market volatility, according to Strategas.

The firm believes that the volatility marks "a return to normal." The relatively calm market in the last 13 years amid a long stretch of uninterrupted quantitative easing was an exception, chief investment strategist Jason De Sena Trennert wrote in a Thursday not.

"As we believe that inflation and inflationary expectations are reverting to the mean and that the pace of globalization is in the process of slowing markedly, it seems reasonable to assume that the "great moderation" that started in the early 1980s is over," Trennert said.

"Thus far in 2024, the market has traded in a 17% range, suggesting further market gyrations are to be expected even in the best of times. Increasing political tensions both here and abroad only heighten those odds," he added.

Political tensions within the U.S. and overseas will further exacerbate the volatile market, he added.

Nonetheless, Trennert is not yet bearish on the market, noting that spikes in the Cboe Volatility Index present buying opportunities for investors.

— Hakyung Kim

Under Armour heads for best day since 2018

Under Armour shares popped 20% during Thursday's session, putting the athletic apparel company on pace for its best session since October 2018.

The gains came after the company posted better-than-expected fiscal first quarter results. Under Armour posted earnings of 1 cent per share on $1.18 billion in revenue. Analysts polled by LSEG estimates an 8-cent loss per share and $1.15 billion in revenue.

The company also agreed to settle a securities lawsuit for $434 million.

— Samantha Subin

Monster heads for worst day since 2018

Monster Beverage headed for its worst day in more than six years on Thursday after the energy drink maker's earnings missed Wall Street expectations.

Shares dropped more than 11% in midday trading. If that holds through session close, it would mark the stock's worst day since March 2018, when shares tumbled more than 14%.

The California-based company earned 41 cents per share on $1.9 billion in revenue during the second quarter. That underwhelmed analysts, who forecasted 45 cents and $2.01 billion.

— Alex Harring

Stocks making the biggest moves midday

These are the stocks making the biggest moves during midday trading:

• Eli Lilly — The drug maker's stock surged 8% after the firm reported second-quarter earnings and revenue that blew past expectations. Eli Lilly also hiked its full-year revenue outlook by $3 billion as sales of its blockbuster diabetes drug Mounjaro and weight loss injection Zepbound spike.
• Under Armour — Shares popped 19% after the athletic apparel maker topped quarterly estimates and adjusted its full-year profit guidance.
• Warner Bros. Discovery — Shares of Warner Bros. Discovery sank 12% after the media company wrote down a $9.1-billion non-cash impairment charge on its TV networks business. The company also reported a wider-than-expected loss and fell short of revenue expectations.

Read the full list of stocks on the move here.

— Samantha Subin

Momentum trade staging a comeback

The momentum trade is showing signs of life, at least according to one fund.

The iShares MSCI Momentum ETF (MTUM) rose more than 2% on Thursday morning and is now slightly positive on the weak. This would be its first positive week in four.

MTUM is a a type of index fund that tracks stocks with the best risk-adjusted price momentum over the past six and twelve months. Its top holdings include Nvidia, Broadcom and Eli Lilly.

— Jesse Pound, Gina Francolla

Disney sits out of broad Dow rally

Disney was the only stock in the blue-chip Dow tracking for losses on Thursday, as the entertainment giant's earnings continued to put downward pressure on shares.

The 30-stock average added around 1.5% in midday trading, with 29 members up. Intel led the charge with a gain of more than 4%, followed by Salesforce's rise of more than 2.5%.

Disney shares, on the other hand, slipped about 0.6% in midday trading. That builds on Wednesday's 4.5% drop, which came after the media titan's earnings report. While Disney beat expectations on both lines in the fiscal third quarter, the parks and experiences business felt pressure.

— Alex Harring

Dollar on pace for third straight day of gains

The dollar index moved 0.3% higher to $103.51 during morning trading, putting it on pace for its third day of gains in a row.

The index also turned positive on the week, seeing week-to-date gains of around 0.3% on Thursday. If it closes around this level Friday, the index would see its first positive week in three.

— Sean Conlon, Gina Francolla

Russell 2000 breakout now looks 'fake,' Wolfe Research says

The Russell 2000's dramatic rise and fall in recent weeks has confirmed its recent breakout wasn't real, according to Wolfe Research.

"Fake breakout: confirmed," Wolfe managing director Rob Ginsberg wrote to clients on Wednesday. "Our fears for the Russell 2000 were realized over the past few days as the rug was pulled out from under it."

Ginsberg noted the small cap-focused index "completely round tripped" over the last three weeks, jumping around 10% only to retreat by around the same amount. He said this is the most eye-popping of recent false breakouts and that more downside is likely ahead for this group.

"We have seen a series of fake breakouts over the past two+ years but this was by far the most notable," Ginsberg wrote.

In this environment, he advised investors to look at sectors like utilities, health care and real estate that held up well amid the drawdown and remain relatively strong.

— Alex Harring

NYSE advancers lead decliners more than 4-1 in early trading

Thursday's rally was driven by a broad group of stocks, with more than four New York Stock Exchange-listed names advancing for every one decliner. Overall, about 2,100 shares were higher, while just 450 declined, according FactSet data.

— Fred Imbert

Restaurant Sales Continue to Struggle

Papa John's and Restaurant Brands are the latest dining companies to report sluggish sales this morning as consumers cut back on eating out.

As Papa John's said this morning, the restaurant industry has been "facing a highly promotional QSR environment and a more value-conscious consumer." The pizza maker posted a 3.6% decline in same-store sales amid lower traffic. That was worse than the 1.8% decline Wall Street expected.

Restaurant Brands saw smaller-than-expected same-store sales growth (up 1.9% vs. up 2.8% estimate). The company's performance was weighed down by disappointing comps out of Popeye's (up 0.5% vs. up 3.5% estimate) and an unexpected drop in Burger King sales (down 0.1% vs. up 0.9% estimate).

Those two companies are hardly alone this earnings season when it comes to disappointing sales figures.

[insert graphic from Musings note]

— Robert Hum

Plenty of runway ahead for Eli Lilly, shares skyrocket on obesity drug potential

Bruised and beaten, Eli Lilly shares have tumbled nearly 16% over the past month. However, the stock is poised to wipe away a huge chunk of those losses in trading Thursday, with a 13% surge.

The maker of anti-obesity treatment Zepbound posted second-quarter results that trounced analyst estimates on the top and bottom lines. That was enough to restore confidence in the potential of its weight loss drugs.

JPMorgan Chris Schott reiterated his overweight rating and said the performance justifies Lilly's status as one of the firm's favorite pharma names. The analyst said Lilly raised its 2024 revenue forecast by $3 billion to a range of $45.4 billion to $46.6 billion. That big boost follows a $2 billion hike it made to the estimate in the first quarter. The company sees earnings of $16.10 to $16.60 per share this year.

"This appears to be largely driven by increased confidence in the company's capacity expansion and ex-US launch on Mounjaro and is well ahead of Street expecations," Schott wrote in a research note.

—Christina Cheddar Berk

Yen weakens against dollar, helps ease volatility worry

The yen fell against the dollar on Thursday, helping ease concerns on Wall Street as equities try to rebound from a stark sell-off fueled in part by the unwinding of the carry trade using the Japanese currency.

The yen was last at roughly 147 per U.S. dollar shortly after the 9:30 a.m. market open.

— Brian Evans

Stocks open higher Thursday

U.S. stocks began Thursday's trading session in the green.

The S&P 500 rose 1%. The Dow Jones Industrial Average gained 247 points, or 0.6%. The tech-heavy Nasdaq Composite ticked up 1.2%.

— Hakyung Kim

Jobless claims come in lower than expected

Initial U.S. jobless claims came in at 233,000, slightly below a Dow Jones estimate of 240,000 — giving investors a sigh of relief that the economy may not be deteriorating as much as feared.

— Fred Imbert

Eli Lilly shares surge on quarterly results

Eli Lilly shares rallied nearly 12% Thursday during premarket trading after the company reported top- and bottom-line beat in the second quarter and raised its full-year revenue outlook.

The drugmaker cited strong sales for its diabetes treatment Mounjaro and weight loss drug Zepbound, for which demand has outpaced supply.

More on the company's second-quarter results can be found here.

— Hakyung Kim

Trump holds 2-point lead over Harris, CNBC survey shows

A new CNBC All-America Economic Survey shows that former President Donald Trump has a 48% to 46% lead over Vice President Kamala Harris.

While the lead is within the survey's margin of error, Trump holds a commanding lead when it comes to the economy. By two to one, respondents think they will be better off financially under Trump.

The survey also found that Democrats are more satisfied with Harris as their nominee — 81% versus the 33% who were satisfied with President Joe Biden.

Click here to read more about the survey results.

—Steve Liesman, Michelle Fox

Silver lining to Wednesday's reversal

Wednesday's turnaround signaled investors that market volatility isn't letting up anytime soon. However, Adam Crisafulli of Vital Knowledge sees the bright side.

"If there's one silver lining to the Wed afternoon wilt, it was that the downdraft was in large part a buyer's strike (as opposed to extremely aggressive selling such as was witnessed Thurs, Fri, and especially Monday)," Crisafulli wrote in a note.

— Fred Imbert

New jobless claims data due out Thursday morning

Investors will get a fresh look at the U.S. labor market on Thursday, when jobless claims for the week ended Aug. 3 will be released at 8:30 a.m. ET.

Economists surveyed by Dow Jones are expecting a reading of 240,000 initial jobless claims. That would be a decrease from the 249,000 claims in the prior week.

Jobless claims have been trending higher in recent months, and Thursday's report could spark market moves given last week's disappointing July payrolls report.

— Jesse Pound

Warner Bros. Discovery, Bumble fall after quarterly reports

Quarterly updates from companies were driving big swings in individual stocks in after hours trading on Wednesday.

• Shares of Warner Bros. Discovery fell 9% after a disappointing second-quarter report that included a $9.1 billion write down.
• Shares of Bumble fell more than 28% after second-quarter revenue missed expectations.
• On the positive side, Duolingo popped 5% after earnings beat Wall Street estimates.

Check out more detail about these and other moves here.

— Jesse Pound

Equity futures open lower

Stock market futures opened modestly lower on Wednesday evening, with S&P 500 futures down about 0.3% shortly after 6 p.m. in New York.

— Jesse Pound