Stock market today: S&P 500 has its best day since 2022 as stocks rally after encouraging labor market data

• US stock indexes soared on Thursday as new jobless claims data raised investors' confidence.
• The Dow rallied 683 points, while the S&P 500 and Nasdaq rose 2.3% and 32.8%, respectively.

US stocks rallied on Thursday, clawing back losses from the rout earlier in the week as new jobs data boosted investors' confidence in the labor market and the economy.

The S&P 500 jumped 2.3% for its best day since November 2022. The Nasdaq Composite spiked 2.8% and the Dow Jones Industrial Average.

The 10-year Treasury yield ticked up two basis points to 3.98%, dipping slightly throughout the day after jumping above 4% earlier in the day.

Fueling Thursday's gain was a drop in weekly jobless claims that soothed fears of an imminent recession after last week's surprise jump in the unemployment rate.

Jobless claims last week dropped 17,000 to 233,00, marking the biggest fall in almost a year. The encouraging data comes after last week's disappointing nonfarm payroll report for July led to a historic selloff and sparked concerns of a recession.

The information technology sector led the S&P 500's rise, up 3.5%, while communication services also notched strong gains.

Pharmaceuticals giant Eli Lilly soared 14% after reporting strong earnings in its most recent quarter, helped by big demand for its GLP-1 weight loss drugs. The company's quarterly revenue of $11.30 billion beat analyst estimates of $9.98 billion, and the company raised its annual revenue outlook.

"We just see unbelievable demand, and we're not even trying that hard to promote this drug. We're not advertising, we told our sales reps to basically just service customers, don't promote," CEO David Ricks said in an interview with CNBC on Thursday.

Next week, investors will be tuned into the latest inflation data, with July's consumer price index scheduled to be released on August 14. The data will be the next big input for bets on Fed policy for the rest of the year.

Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:

• S&P 500: 5,319.30, up 2.3%
• Dow Jones Industrial Average: 39,446.82, up 1.76% (+683.30 points)
• Nasdaq composite: 16,660.02, up 2.87%

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• Palantir soared after announcing a deal with Microsoft to sell AI tools to US defense and intelligence agencies.
• The mortgage lock-in effect shaved $20 billion off the US economy last year.
• China's imports last month surged 7.2% year-over-year as the country moves to stockpile tech ahead of trade restrictions, BofA said.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil rose 1% to $76.04 a barrel. Brent crude, the international benchmark, ticked higher 0.9% to $79.02 a barrel.
• Gold traded higher at $2,463.30
• The 10-year Treasury yield rose two basis points to 3.98%
• Bitcoin rose 8% at $59,549.