As of press time, the Dow Jones Industrial Average rose 0.12%, the Nasdaq composite index rose 0.13%, and the S&P 500 index rose 0.16%.

Michael Brown, senior strategist at Pepperstone Group, said, "I'm not surprised people are trying to buy on dips. The basic bull market is still strong - profits and economic growth look resilient and the Fed should start cutting rates from September."

Investors began selling artificial intelligence stocks that have led the market since this year as the possibility of a Fed rate cut in September grew, boosting market optimism. This is especially helpful for small-cap and cyclical stocks, as the rate cut will lower borrowing costs and benefit these companies.

Affected by this sector rotation, the Russell 2000 Small Cap Index has risen more than 9% in the past five trading days, while the Nasdaq has fallen more than 2.5% for the first time since 2001, and the blue chip Dow Jones Industrial Average has closed above 41,000 for the first time.

Investors have been hoping for the leadership sector of the US stock market to expand continuously because they are worried that the rebound driven by tech stocks is losing momentum.

However, some market participants expect that changing the leading sector of the US stock market may not be enough to protect the stock market from future challenges, including the possibility of an economic slowdown.

Lauren Goodwin, chief market strategist at New York Life Investments, said, "The focus of the US stock market right now is the Fed's pivot. The timing of the Fed's rate cut is expected to be two to three months earlier than we expected. Therefore, small-cap stocks and other areas that receive inflows of funds will see significant improvements."

But he pointed out, "The reality of the market is that the US economy will be in a soft landing state in the next nine months."

Several Fed decision makers speak.

Several Fed decision makers, including San Francisco Fed President Daly and Fed director Bowman, will speak on Thursday.

Former Dallas Fed President Kaplan said that given recent progress on inflation, the Fed may cut rates in September, but this is unlikely to mark the beginning of a full rate-cut cycle.

Kaplan, currently Vice Chairman of Goldman Sachs and former President of the Dallas Fed who left in October 2021, said on Thursday, "The path to a rate cut in September is very clear, and I think the Fed is very likely to cut rates again in December. But that doesn't mean the Fed will begin a rate-cutting cycle, given the high fiscal deficits and high energy prices; the Fed will make decisions meeting by meeting."

Fed Chairman Powell said in a speech on Monday that second-quarter economic data makes policy makers more confident that inflation is decreasing toward the Fed's 2% target, which could pave the way for a rate cut in the near future.

Fed director Bullard hinted on Wednesday that the Fed will soon cut interest rates, provided that there are no major surprises in US inflation and employment.

Bullard said at a conference, "I believe the current data aligns with the expectation of a soft landing, and I will look for data in the coming months to support this view. Therefore, although I don't think we've achieved our ultimate goal yet, I do think we are approaching the moment when it makes sense to lower policy rates."

As with other policy makers' comments, Bullard and his colleagues' comments indicate that the Federal Open Market Committee (FOMC) is unlikely to cut rates at this month's policy meeting, and the possibility of a rate cut in September is greater.

Data over the past few months shows that US inflation has unexpectedly risen in the first quarter of 2024, but has now eased, making Fed officials more optimistic.

Last week's initial jobless claims data exceeded expectations.

On Thursday's economic data, the number of Americans filing for unemployment benefits for the first time rose by the biggest amount since early May, while continuing claims increased, further confirming a soft labor market. The US Labor Department reported on Thursday that in the week ending on July 13th, the number of Americans filing for unemployment benefits for the first time increased by 0.02 million to 0.243 million. Economists expected a median of 0.229 million.

The US Department of Labor reported on Thursday that the number of initial jobless claims in the United States increased by 0.02 million to 0.243 million for the week ending July 13th. Economists' median forecast was 0.229 million.

As of the week ending July 6, the number of Americans continuously applying for unemployment benefits increased by 0.02 million to 1.87 million people, the highest level since November 2021. The weekly fluctuations in the number of initial applications for unemployment benefits are often large at this time of year because the survey period includes holidays such as Independence Day, and schools are also on summer vacation. The four-week moving average of initial claims for unemployment benefits rose slightly to 234,750 people. The number of initial claims for unemployment benefits not adjusted for seasonal factors increased by 36,824 to 279,032, the highest level since January. Texas and California saw the largest increases, while Georgia, Pennsylvania, Missouri, and New York also saw increases in the number of claims.

At this time every year, the weekly fluctuations in the number of initial claims for unemployment benefits are often large because the survey period includes holidays such as Independence Day, and schools are also on summer vacation.

Other reports show that employers have slowed their hiring pace, and the US unemployment rate rose to 4.1% last month, the highest since 2021. The slowdown in the job market and recent inflation decline have strengthened the Federal Reserve's reasons for cutting interest rates in the coming months.

The four-week moving average of initial claims for unemployment benefits has slightly risen to 234,750 people.

The number of initial claims for unemployment benefits not adjusted for seasonal factors increased by 36,824 to 279,032, the highest level since January. Texas and California saw the largest increases, while Georgia, Pennsylvania, Missouri, and New York also saw increases in the number of claims.

On Thursday, the European Central Bank kept interest rates unchanged and offered little indication of any plans, even as investors and economists bet on another rate cut in September. The ECB made a landmark cut last month.

The ECB on Thursday kept the deposit rate at minus 0.75%, in line with the average forecast of economists. The bank reiterated that borrowing costs would remain "appropriately restrictive for as long as necessary" to ensure inflation returns to 2%.

"The newly released information overall supports the Governing Council's previous assessment of the medium-term inflation outlook," the European Central Bank said in a statement, adding that it once again refrained from committing to specific rate paths.

Focus stocks

Growth technology stocks rose in early trading, with Nvidia up nearly 3%, Meta Platforms up nearly 2%, and Tesla up more than 1%.

Most popular Chinese concept stocks rose, with Hollysys Automation Technologies up nearly 4%, PDD Holdings up more than 1%, and NIO Inc. and Li Auto Inc. rising accordingly.

The chip sector, which suffered heavy losses yesterday, rebounded today, with Intel up nearly 3%, Taiwan Semiconductor up nearly 2%, and Broadcom up over 1%.

$Amazon (AMZN.US)$Adobe rose by 0.05%, with online sales for major retailers in the United States on the first day of Amazon Prime Day estimated at around $7.2 billion, according to a latest report released by Adobe Analytics on Wednesday.

$D.R. Horton (DHI.US)$Rising by over 10%, reaching a new historical high. The company's third-quarter financial report exceeded expectations.

$Domino's Pizza (DPZ.US)$It fell nearly 13% in early trading as the company lowered its store opening target and sales were lower than expected.

A plant-based meat company$Beyond Meat (BYND.US)$It fell nearly 10% as the company reportedly met with bondholders to discuss restructuring its balance sheet.