(The Hill) — The stock market surged Thursday following better-than-expected jobless claims that soothed recession fears sparked by last week’s weaker-than-expected jobs report.

The Dow Jones Industrial Average closed with a gain of 683 points, or 1.8 percent, while the Nasdaq composite was up 2.9 percent. The S&P 500 gained 2.3 percent, its best day since November 2022, according to CNBC.

First-time unemployment claims fell by 17,000 last week to 233,000, a small but encouraging sign for the labor market, according to Labor Department data released Thursday.

Stocks dropped dramatically Monday amid mounting concerns about the overall health of the U.S. economy more than a year after the Federal Reserve hiked interest rates to their highest level in 23 years.

The Fed is widely expected to start cutting rates next month as inflation dropped closer to its 2-percent goal, clocking in at 3 percent year over year in June and dropping 0.1 percent, its first monthly decline since the pandemic.

But unemployment ticked up to 4.3 percent last month, according to the latest jobs report, and a string of worrying earnings reports by major companies during the second quarter fueled concerns.

While the latest jobless claims seem to have soothed a shaken Wall Street, there is concern that the so-called soft landing may be harder than expected.

“Low layoffs alone are not enough to make the Federal Reserve feel good about the state of the economy, but part of the reason a soft landing is still possible,” Diane Swonk, chief economist at KPMG, wrote on the social platform X.

“However, Fed needs to ensure the demand for workers does not evaporate entirely. Markets not happy because the data do not justify an inter-meeting cut. That was always very high hurdle for the Fed,” Swonk added.