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Wall Street climbs amid thin volumes ahead of eventful week

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By Shristi Achar A and David Carnevali

(Reuters) – U.S. stocks edged higher on Thursday regaining some of their momentum thanks to a rebound by technology stocks, while volatility dropped to record lows ahead of an eventful economic and policy calendar next week.

The CBOE Volatility index, also known as Wall Street’s fear gauge, dropped to a fresh pre-pandemic low of 13.66.

“What you are really seeing in the vol market is an unwillingness to engage,” said David Bianco, Americas chief investment officer for asset manager DWS Group. “You’ve just got paralysis in investors.”

Investors were sitting on the sidelines ahead of inflation data and a Federal Reserve policy meeting next week.

Traders have priced in a 73% chance of the U.S. central bank holding interest rates at the current 5%-5.25% range during its monetary policy meeting on June 13-14, according to CMEGroup’s Fedwatch tool. However, they see a 50% chance of a rate hike in July.

The two-year Treasury yield, which tends to move in step with short-term rate expectations, slipped from one-week highs to 4.5% after a sharp jump in weekly jobless claims signaled a softening labor market.

The U.S. Labor Department is due to release inflation data on June 13, the first day of the Fed meeting. The numbers are expected to show consumer prices cooled slightly in May but core prices remained sticky.

Meanwhile, a rebound by technology and megacap stocks helped major indexes regain their footing amid thin volumes.

Heavyweight Amazon.com Inc gained 2.06% as Wells Fargo initiated coverage on the company with an “overweight” rating, while Nvidia Corp, Apple Inc and Tesla Inc rose between 1% and 3.5%.

GameStop Corp tanked 18.10% as billionaire investor Ryan Cohen took over as executive chairman after the video-game retailer ousted its CEO and posted a bigger-than-expected quarterly loss.

The Dow Jones Industrial Average rose 146.76 points, or 0.44%, to 33,811.78, the S&P 500 gained 18.18 points, or 0.43%, to 4,285.7 and the Nasdaq Composite added 92.05 points, or 0.7%, to 13,196.94.

Among the 11 major S&P sectors, consumer discretionary led the charge, while real estate and energy indexes slipped, with the latter being hit by a drop in oil prices.

Adobe added 3.99% after Piper Sandler raised its prices target on the stock to $500. The Photoshop software maker said it was offering its AI tool “Firefly” to large businesses.

Lucid Group reversed gains and was down 1.17% after the U.S. luxury electric-vehicle maker’s head of China operations, Zhu Jiang, said the company was preparing to enter the world’s largest auto market.

Advancing issues outnumbered declining ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored decliners.

The S&P 500 posted eight new 52-week highs and two new lows; the Nasdaq Composite recorded 55 new highs and 37 new lows.

(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi and Marguerita Choy)

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