Stocks pop as focus fixes on jobs data

US stocks were higher on Thursday as investors looked again to labor market data for signposts to the path of interest rates.

The Dow Jones Industrial Average (^DJI) lagged the other major averages, rising about 0.2%. Meanwhile the (^GSPC) popped 0.5% and the Nasdaq Composite (^IXIC) futures pointed to a rebound for tech stocks, rising 0.8%.

Signs this week that the labor market is finally getting back to normal point to the Federal Reserve’s anti-inflation interest-rate hikes as having their desired impact. With a soft landing for the economy looking more likely, traders have been betting on a Fed policy shift to cutting rates.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

But the market’s nerve was rattled Thursday after leaders at the Bank of Japan hinted the end of the central bank’s negative interest-rate regime is near. That prospect helped drive the 10-year Treasury yield (^TNX) up as much as eight basis points to 4.18%.

Adding to the caution was growing speculation that stocks are primed for a pause after their blistering November rally, given December is usually a “boring” month for the markets.

The latest weekly jobless claims data revealed 220,000 claim were filed in the week ending Dec. 2. The number came in line with what economists surveyed by Bloomberg had expected and up just 2,000 from the week prior, largely reflecting limited increases in layoffs.

But the crucial monthly US jobs report on Friday will be the real test of inflation and interest-rate expectations before the Fed’s last meeting of the year next week.

In commodities, oil prices regained some ground after hitting a five-month low. West Texas Intermediate futures (CL=F) and Brent (BZ=F) crude futures, the international benchmark price, both rose about 1%.