More US workers applied for unemployment benefits last week than the week before, when economists were expecting to see a slight decline. The numbers are still low compared with history, but they could suggest some slowing in the job market.

Wall Street is actually hoping for just such a slowdown. That’s because a cooldown can drive inflation lower and convince the Federal Reserve to deliver the cuts to interest rates that traders desire so much. The danger is if the slowdown for the economy overshoots and turns into a recession, which would ultimately hurt stock prices.

In a potentially discouraging signal for markets, a separate report on Thursday said the productivity of US workers wasn’t quite as strong in the first three months of the year as economists thought. That’s key because strong productivity gains could allow wages for US workers to keep rising without adding as much upward pressure on inflation.

After the economic reports, Treasury yields were holding relatively steady. The yield on the 10-year Treasury rose to 4.29 per cent from 4.28 per cent late Wednesday.

The two-year yield, which moves more on expectations for Fed action, fell to 4.72 per cent from 4.73 per cent late Wednesday.

On Wall Street, Lululemon Athletica climbed 4.8 per cent after reporting better profit for the latest quarter than analysts expected, in large part because of strong growth in sales outside the Americas. J.M. Smucker rose 4.6 per cent after the company behind Uncrustables and Jif peanut butter likewise topped profit expectations.

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Robinhood Markets rose 6.5 per cent after saying it agreed to buy Bitstamp, a cryptocurrency exchange. Robinhood said the deal, which still needs regulatory approvals, will bring in customers from around the world, including the European Union and Asia.

GameStop soared 47.5 per cent in the latest whipsaw move for the video-game retailer’s stock. It’s been particularly volatile since a central character from its initial supernova run in 2021 recently returned to social media after a years-long hiatus. The online hero, who goes by Roaring Kitty among other nicknames, is scheduled to return to YouTube for a live stream on Friday.

Nvidia reversed an early gain and slipped 1.2 per cent a day after becoming the third company to see its total value top $US3 trillion. The chip company has been riding a tidal wave of enthusiasm for artificial-intelligence technology.

The week’s big event will likely arrive on Friday, when the US government offers the latest monthly update on the job market. Economists expect it to show slight accelerations in hiring and average hourly wage gains from the month before.

As of now, virtually no one expects the Federal Reserve to make any move on interest rates at its meeting next week. But the hope is still for the Fed to cut its main interest rate at least once this year, down from its highest level in more than two decades.

AP

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