U.S. stocks rose to a record with a late-session advance, while Treasuries slipped as a decline in jobless claims signaled a modest firming of the labor market.

The S&P 500 Index halted a two-day decline. Gains for tech shares lifted the Nasdaq 100 to a bigger advance. Ten-year Treasury yields rose to about 1.15 per cent. In Europe, the Stoxx 600 Index was buoyed by strong results from Royal Mail Plc and Credit Agricole SA.

Applications for U.S. state unemployment benefits fell slightly last week in a sign that the labor market is still gradually improving as the vaccine rollout continues and business restrictions ease. After a sharp run-up in equities at the start of February, U.S. stocks have taken a pause as investors weighed the implications of the latest inflation data.

In the background, there’s still a debate over whether more U.S. stimulus, the vaccine distribution and the government’s determination to kickstart growth will cause the American economy to overheat.

“While inflation is not showing up in the data right now, inflation is on its way thanks to fiscal and monetary stimulus and pent-up consumer demand that should intensify as the economy reopens,” Nancy Davis, founder of Quadratic Capital Management, said in a note.

In a speech Wednesday, Federal Reserve Chair Jerome Powell said the U.S. job market remains a long way from a full recovery and called on both lawmakers and the private sector to support workers. He also said it will require more than supportive monetary policy to achieve and sustain maximum employment.

Elsewhere in markets, oil slumped after capping the longest run of gains in two years. The dollar held steady and Bitcoin climbed above US$47,000. In Asia, several markets in the region were closed ahead of the Lunar New Year holiday.

These are the main moves in markets:

Stocks

The S&P 500 Index rose 0.2 per cent as of 4 p.m. in New York.
The Stoxx Europe 600 Index advanced 0.5 per cent.
The MSCI Asia Pacific Index increased 0.2 per cent.
The MSCI Emerging Market Index advanced 0.4 per cent.

Currencies

The Bloomberg Dollar Spot Index was little changed.
The euro advanced 0.1 per cent to US$1.2125.
The British pound fell 0.2 per cent to US$1.3806.
The Japanese yen weakened 0.2 per cent to 104.79 per dollar.

Bonds

The yield on 10-year Treasuries advanced one basis point to 1.15 per cent.
The yield on two-year Treasuries was unchanged at 0.11 per cent.
Germany’s 10-year yield decreased two basis points to -0.46 per cent.
Britain’s 10-year yield decreased two basis points to 0.47 per cent.

Commodities

West Texas Intermediate crude fell 0.8 per cent to US$58.22 a barrel.
Gold fell 0.9 per cent to US$1,826.68 an ounce.