Wall Street Today | Jobless Claims Jumped Last Week to Highest Level Since October 2021

Worker filings for U.S. unemployment benefits increased sharply last week, a possible early sign of cooling in the strong labor market.

Initial jobless claims, a proxy for layoffs, rose by 28,000 to a seasonally adjusted 261,000 in the week ended June 3, the Labor Department said Thursday. That was the highest level since Oct. 30, 2021, when claims were 264,000.

As the Federal Reserve nears the end of its most aggressive tightening campaign in decades, a softening US dollar would bode well for one particular cohort of beaten-down stocks: consumer staples. 

These so-called safety shares, known for their strong dividend yields and steady business, fell out of favor this year and are trailing well behind those of riskier technology and discretionary companies as higher borrowing costs have reduced their appeal as dividend plays. 

T Rowe Price Group Inc., Bank of America Corp. and Citigroup Inc. are among those who reckon the hype around all things artificial intelligence is topping out. But they contend that’s not bad news for the market because so-called cyclicals — ‘old economy’ companies such as banking and mining — are primed for a rebound. 

Such stocks have been elbowed out of the way in recent months by the stampede for AI-linked stocks. With record investment flows, these stocks have led the Nasdaq 100 benchmark to its biggest ever outperformance against the Russell 2000 small-cap share index.