A rally in tech shares has driven the Nasdaq index higher, with US weekly jobless claims dipping below 2 million for the first time since mid-March bolstering optimism around an economic rebound from the coronavirus-driven slump.

The NYSE FANG+TM Index, which includes Facebook Inc, Apple, Amazon.com Inc, Netflix and Alphabet Inc, hit an intraday record high in morning trading.

But the S&P 500 and the Dow Jones indices pulled back slightly after gaining earlier this week.

“The market is due for a pause,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.

“It’s really important to realise that US equity investors have been given a great gift in the middle of what is probably the deepest recession in 80 years,” he said, referring to the strong run for Wall Street since late-March.

Wall Street’s main indexes have recovered sharply from their March lows and the tech-heavy Nasdaq index is now only 1.3 per cent away from surpassing its all-time closing high hit in February.

A report from the US Labor Department showed new claims for state unemployment benefits totalled 1.877 million for the week ended May 30, down from 2.126 million in the prior week. Economists polled by Reuters had forecast 1.8 million initial claims in the latest week.

The focus will now shift to the closely watched employment report for May, due on Friday, which is expected to show unemployment rate rocketing to 19.8 per cent, a post-World War II record.

In early trading, the Dow Jones Industrial Average was down 13.07 points, or 0.05 per cent, at 26,256.82, the S&P 500 was down 2.74 points, or 0.09 per cent, at 3,120.13 and the Nasdaq Composite was up 21.04 points, or 0.22 per cent, at 9,703.95.

American Airlines Group Inc jumped 11.0 per cent after the airline revealed plans to fly more than 55 per cent of its July 2019 domestic capacity and boost its US flight schedule next month.

Jif peanut butter maker JM Smucker Co fell 2.3 per cent after the company forecast a decline in full-year sales on weakness in sales to restaurants and schools.

Charles Schwab Corp gained 0.5 per cent after it received an anti-trust approval from the Department of Justice for its purchase of TD Ameritrade Holding Corp. Shares of TD Ameritrade jumped 3.5 per cent.

EBay Inc jumped 7.1 per cent after it raised its current-quarter revenue and profit forecast, as people stuck at home ordered more from its platform due to the COVID-19 pandemic.

Declining issues outnumbered advancers more than 2-to-1 on the NYSE and nearly matched them on the Nasdaq.

The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 29 new highs and one new low.

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