U.S. stocks experienced a strong rally, with the S&P 500 closing up 2.3%—its largest one-day gain since late 2022—driven by easing recession fears and market stabilization. This rebound followed a period of high volatility, fueled by concerns over rising jobless claims and a broader economic slowdown. However, Thursday’s better-than-expected jobless claims report provided a relief, suggesting that the labour market remains resilient, contradicting fears that the economy is slipping into a recession.
Semiconductor stocks, which have been key drivers of the current bull market, faced pressure as the Philadelphia Semiconductor Index (SOX) retreated 27% from its July highs before attempting to stabilize this week. The SOX, closely watched as a market leader, tested critical support levels, including its year-to-date lows and the 200-day moving average.
Technical analysts are closely monitoring the SOX, noting that while it’s in a near-term pullback, it remains in a long-term uptrend. A break above the current downtrend line could signal a renewed bullish momentum, but failure to do so might lead to further declines. The 4,275 level is seen as a critical support for the index, with a breach potentially triggering a more significant correction.
