A relatively light day of trading on Wall Street ended Thursday with a broad rally for stocks as investors welcomed new jobless benefits data that shows the labor market remains strong.

The S&P 500 rose 1.7%, with roughly 95% of stocks within the benchmark index closing higher. The gains more than made up for the index’s losses the previous two days, the latest oscillation in what has been a volatile, holiday-shortened week for stocks.

The Dow Jones Industrial Average rose 1% and the Nasdaq composite gained 2.6%.

Technology stocks, which are down 29% this year, powered much of the rally. Apple and Microsoft each rose 2.8%.

Tesla jumped 8.1% as it continued to recover from steep losses Tuesday following reports it temporarily suspended production at a factory in Shanghai. The stock is still down nearly 66% for the year.

Investors have been hoping for a “Santa Claus” rally. That’s Wall Street’s term for when stocks rise in the last five trading days of December and the first two of January. Even a late rally likely wouldn’t change the broader market’s trajectory for the month.

Every major index is headed for a loss in December that will cap a dismal year. While companies in the S&P 500 raked in record profits this year, investors in the benchmark index will see a roughly 20% loss in 2022, which would mark its worst year since 2008.

Still, going back to World War II, history suggests the market may fare better next year, said Sam Stovall, chief investment strategist at CFRA.

“When you look at down years for the market, history offers some encouragement in that the market is up an average of 14% in the following year and has risen in price more than 80% of the time,” Stovall said.

The S&P 500 rose 66.06 points to 3,849.28. The Dow added 345.09 points to 33,220.80. The Nasdaq rose 264.80 points to close at 10,478.09.

Small company stocks also posted solid gains. The Russell 2000 index rose 44.23 points, or 2.6%, to 1,766.25.

Treasury yields were mixed. The yield on the 10-year Treasury fell to 3.83% from 3.89% late Wednesday.

Markets in Europe closed higher, while markets in Asia slipped.

Investors have been focused on the Federal Reserve’s continuing fight against stubbornly hot inflation. The central bank has been raising interest rates in an effort to stifle borrowing and spending and cool inflation, but the strategy risks going too far and sending the economy into a recession. That has put an even greater focus on a wide range of data for Wall Street as it tries to determine whether inflation is cooling and how various areas of the economy are faring.

The latest update from the U.S. shows that the number of people seeking unemployment benefits rose only slightly last week. The labor market has been one of the stronger areas of the economy. That’s normally good news and it has helped create a bulwark against a recession as other areas of the economy slow. It has also made the Fed’s fight against inflation more difficult and means the central bank will have to likely remain aggressive, raising the risk that its policy could bring on a recession.

The Fed has already raised its key interest rate seven times this year and is expected to continue raising rates in 2023. The key lending rate, the federal funds rate, stands at a range of 4.25% to 4.5%, and Fed policymakers forecast that the rate will reach a range of 5% to 5.25% by the end of 2023. Their forecast doesn’t call for a rate cut before 2024.

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