Market Snapshot: Dow, S&P 500, Nasdaq score best day in nearly a week despite Microsoft warning on dollar stocks

How are stock indexes trading?

The Dow Jones Industrial Average
DJIA,
+0.57%
rose 196 points, or 0.6%, to 33,012.

The S&P 500
SPX,
+1.08%
was up 45 points, or 1.1%, at 4,147.

The Nasdaq Composite
COMP,
+1.93%
gained 236 points, or 2%, to trade at 12,236.

On Wednesday, the Dow fell 176.89 points, or 0.5%, to 32,813.23, while the S&P 500 index and Nasdaq Composite each shed 0.7%.

What’s driving the markets?

Stocks were trading modestly higher around midday Thursday, shrugging off earlier weakness after software giant Microsoft
MSFT,
-0.51%
warned about the toll taken by a stronger U.S. dollar. The company now expects fiscal fourth-quarter sales of $51.94 billion to $52.74 billion, down from previous guidance of $52.4 billion to $53.2 billion, while earnings are seen between $2.24 to $2.32 a share, down from prior guidance of $2.28 to $2.35 a share. Shares fell 3.3%.

The ICE U.S. Dollar Index
DXY,
-0.69%
jumped to around a 20-year high in May and remains up more than 6% year to date. The index was off 0.6% on Thursday.

Private-sector payrolls rose by 128,000 in May, according to the ADP National Employment Report released Thursday. Economists polled by The Wall Street Journal had forecast a gain of 299,000 private sector jobs.

Separately, data showed first-time jobless claims fell 11,000 to 200,000 in the week ended May 28, while first-quarter labor productivity was revised to negative 7.3% from an initial negative 7.5% and first-quarter unit-labor costs were raised to 12.6% from a previous estimate of 11.6%.

Jobs-related data comes a day ahead of May nonfarm payrolls numbers from the Labor Department, though economists note that the ADP data has been a poor guide to the official figures on a month-to-month basis.

“The ADP report points to a dramatic slowdown in private payroll employment gains in May to 128,000 but, given the survey’s surprisingly poor real-time correlation with the official nonfarm payroll data, we continue to forecast that the latter will show a 300,000 when the report is released tomorrow,” wrote economists at Capital Economics, in a note.

Investors also remain glued to updates from Federal Reserve officials on its monetary policy patch. Vice Chairman Lael Brainard said Thursday she didn’t think the central bank should pause its planned series of interest rate hikes in September, which are designed to combat the highest inflation in about 40 years, in an interview on CNBC.

Investors will hear from Cleveland Federal Reserve President Loretta Mester at 1 p.m. Eastern.

Growing expectations that the Fed will follow up widely expected half percentage point interest rate increases in June and July with another in September have been weighing on stocks and bonds and sending Treasury yields higher.

But some respite was emerging on Thursday, with Wall Street pointing to a positive session as the yield on the 10-year note
TMUBMUSD10Y,
2.924%
slipped around 1 basis points toward 2.92%.

And oil prices turned higher after OPEC+ agreed to boost output by 648,000 barrels a day in July and August, with U.S. crude
CL.1,
+1.45%
and Brent prices
BRN00,
+1.31%
up more than 1.5% each. The agreement comes as Russian oil production is expected to fall sharply in response to sanctions targeting the country’s energy export and it exceeds the prior 432,000 barrel-a-day monthly increases the group has been approving since last year in response to the COVID-19 pandemic.

Read: Bank of America CEO Brian Moynihan says Americans still haven’t spent all their stimulus money

What companies are in focus?

Chewy Inc.
CHWY,
-4.88%
rallied nearly 23% after the online pet-products retailer reported a surprise profit in its fiscal first quarter.

Hewlett Packard Enterprises Co.
HPE,
-5.86%
fell 5.3% after earnings and sales missed Wall Street forecasts.

C3.ai Inc.
AI,
-6.79%
stock plunged 6.9% after the software group forecast slimmer revenue in the coming year than expected by Wall Street.

Videogame retailer and meme stock GameStop Corp.
GME,
+9.24%,
reported a narrower-than-forecast loss, while inventories surged. Shares were up 10.4%.

How are other assets trading?

Bitcoin 
BTCUSD,
+1.99%
 was trading up 0.8% near $30.290.

In European equities, the Stoxx Europe 600 
SXXP,
+0.57%
rose 0.6%. London stocks were not trading in observance of the Queen’s Platinum Jubilee extended holiday weekend.

In Asia, the Shanghai Composite 
SHCOMP,
+0.42%
closed up 0.4%, the Hang Seng Index 
HSI,
-1.00%
fell 0.9% in Hong Kong, and Japan’s Nikkei 225 
NIK,
-0.16%
slipped 0.1%.

––Barbara Kollmeyer contributed reporting to this report