Wall Street bounced on Thursday as a recovery in oil prices outweighed the shock of weekly jobless claims soaring past 6 million.

Initial claims for unemployment benefits last week exceeded the top end of analysts’ estimates at 5.25 million, and U.S. President Donald Trump has warned of more economic pain as more states enforce sweeping stay-at-home orders to curtail the coronavirus pandemic.

“The U.S. labor market has never experienced such a disruption,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

“Most will likely say the United States is sitting squarely in a recession right now, but the real question at hand is for how long and to what extent.”

The Dow Jones (DJI) and S&P 500 (SPX), still fresh from their worst opening quarters in history, were lifted by a surge in oil prices as Saudi Arabia and Russia signaled they were ready to co-operate to help stabilize the market.

The energy index (SPNY), which has lost half its value this year partly due to their price war, jumped 13% with Exxon Mobil Corp (N:XOM) and Chevron Corp (N:CVX) posting the biggest gains among Dow components.

But analysts predict further declines for U.S. equity markets as more companies announce production cuts and withdraw financial forecasts ahead of the earnings season.

Last updated on Thu. April 2, 2020.