U.S. stocks had their best trading day since November 2022 after a surprise decline in jobless claims helped ease concerns about an economic slowdown.

The leading index S&P 500 ended the day with a gain of 2.3 percent. The Dow Jones Industrial Average rose by 1.8 percent and the Nasdaq gained 2.9 percent.

Stocks in Asia posted modest gains, recouping some of the losses from earlier in the week. Both Hong Kong’s Hang Seng Index and South Korea’s Kospi rose more than 1%. In Japan, stocks in the Nikkei 225 and Topix were largely unchanged.

This came after Japanese stocks experienced their worst day since 1987 earlier in the week, leading to a major global market collapse.

“Although the latest unemployment data is not typically a major market event, it reinforces the view that recent pessimism may have been overdone,” said a report from the chief investment officer of UBS Global Wealth Management.

Official figures from the US Department of Labor show that the number of initial applications for unemployment benefits in the US fell more than expected last week, to 233,000.

Despite the apparent recovery Analysts warn that trading on global markets is likely to remain choppy for the time being.

“Market volatility is creating short-term trading opportunities for investors,” said Peter McGuire of trading platform XM.com.

“The election season is going to be bumpy and we are all waiting for the Federal Reserve’s decision in September.”

The Federal Reserve refrained from cutting interest rates last week – a measure that normally stimulates growth – unlike other central banks such as the Bank of England.

But this week’s market turmoil led to further speculation about when – and by how much – the Fed will cut borrowing costs.

“The Fed is likely to cut interest rates by as much as 50 basis points in September, which in turn will support the rising valuation of the market,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners.