Wall Street Today | US Jobless Claims Tick Up Slightly, Remain Historically Low

Stocks and bonds have backed away from the worst of this week’s rout, though key data Friday threatens to upend the market again.

US equity benchmarks were erasing losses Thursday after the latest readout showed weekly unemployment claims holding near historical lows. The S&P 500 has been hovering above a key level that technical analysts warn could drive a steeper drop. With the gauge already down roughly 8% from July highs, a too-hot number from Friday’s monthly non-farm payrolls report could push yields up and stocks down as the report is expected to help inform the central bank’s next move.

Applications for US unemployment benefits remained historically low last week, highlighting ongoing strength in the labor market.

According to Labor Department data out Thursday, initial jobless claims ticked up slightly to 207,000 in the week ending Sept. 30. The median estimate in a Bloomberg survey of economists called for an increase to 210,000. Continuing claims, a proxy for the number of people receiving unemployment benefits, were also little changed at 1.7 million in the week through Sept. 23.

Crude volatility surged higher on Wednesday as worries about the outlook for global economic growth and the potential impact on consumption dragged futures prices lower, sparking a flurry of options trading, according to traders and brokers involved in the market.

Traders positioned for prices over $100 a barrel were suddenly scrambling for protection. Bullish bets were rolled down to lower levels, and some traders raced to hedge themselves against further drops. Those moves showed up in surging options volumes and a jump in the premium for bearish puts over bullish calls to the biggest since June.