Peloton stock is soaring on Thursday as investors hope the at home fitness company is finding its stride amid an ongoing turnaround strategy.

On Thursday, Peloton reported revenue of $644 million for its fiscal-fourth quarter, up from $628 million the year prior. This marked the company's first positive quarter of revenue growth on a yearly basis since 2022. Additionally, Peloton reported a earnings per share loss of $0.08, narrower than the $0.17 loss the Street had expected.

Peloton stock had been down more than 40% entering Thursday's release.

After, a roaring rally over the last two weeks in large cap tech, the most loved area of the market over the past 18 months has been quieter in the past few trading sessions.

Goldman Sachs equity strategist Ben Snider told Yahoo Finance the most loved part of the market could now be entering a period of digestion.

"I think most of the short term volatility in those stocks is behind us," Snider said.

He added, "The trajectory of sales and earnings growth has been resilient, more resilient than a lot of investors feared coming into the second quarter. Valuations are by no means low compared to history, but they're lower than they were several weeks ago, and we won't get another earnings report for a few months now."

Hedge funds trimmed exposure to the "Magnificent Seven" tech stocks, excluding Amazon (AMZN) and Apple (AAPL), for the firs time since the start of 2022, according to Snider's recent analysis of securities filings for the end of the second quarter.

Snider said this move "speaks to the anxiety we were hearing from investors heading into the second quarter earnings season."

Snider added investors felt the stocks had performed very well and benefitted from the excitement around AI. But they also expressed "some concern that that AI investment boom was coming to an end."

But in August that trade has largely shifted, with megacap tech recently leading the S&P 500 (^GSPC) back near highs.

"In my conversations with investors, including hedge fund clients, there was very clearly excitement at the opportunity to buy some stocks that they already liked at lower valuations given the sell off," Snider said.

Now, after the snapback in tech stocks, investors aren't as convicted as they were when buying the dip in early August.

"I would call sentiment [around megacap tech] cautiously optimistic," Snider said.

Initial filings for unemployment benefits were roughly flat last week, reflecting a labor market that is cooling but not rapidly deteriorating as the employment outlook remains in focus ahead of Federal Reserve Chair Jerome Powell's Friday speech in Jackson Hole, Wyo.

New data from the Department of Labor released Thursday showed 232,000 initial jobless claims filed in the week ending Aug. 17, up from 228,000 the week prior and in line with economists' expectations.

Continuing jobless claims rose again to 1.86 million, the highest level since November 2021.

"Claims appear to be leveling off on a trend basis," Oxford Economics senior economist Nancy Vanden Houten wrote in a note to clients on Thursday. "There is nothing in the claims data to change our view that, while the labor market is softening, it isn't weak enough to warrant anything more than a 25bps rate cut at the Fed's September meeting."

Oliver Allen, senior economist at Pantheon Macroeconomics, added in a client note on Thursday: "Underlying claims have plateaued, and will probably slip back in the near term."

As of Thursday afternoon, markets were fully pricing in an interest rate cut from the Fed by the end of September, with a roughly 25% chance the Fed cuts interest rates by 50 basis points, per the CME FedWatch Tool.

Deutsche Bank senior US economist Brett Ryan reasoned the case for a 50 basis point interest rate cut is more likely to be settled when the August jobs report is released on Sept. 6, not during Powell's Friday speech.

"The committee wants to be very much data dependent and doesn't feel that it wants to outline a preset course here," Ryan argued. "So there isn't much he could say."

Mortgage rates dipped again this week, a positive move for potential house hunters.

The average rate on the 30-year fixed-rate mortgage fell to 6.46% from 6.49% last week, Freddie Mac reported on Thursday. A year ago, the average rate on a 30-year fixed-rate loan was 7.23%.

Separately, the average rate for the 15-year fixed mortgage was 5.62%, down from 5.66% a week prior. The rate on a 15-year loan was 6.55% a year ago.

“Although mortgage rates have stayed relatively flat over the past couple of weeks, softer incoming economic data suggest rates will gently slope downward through the end of the year,” Sam Khater, Freddie Mac’s chief economist, wrote in a statement.

That expectation seems to have the market in a holding pattern.

“Earlier this month, rates plunged and are now lingering just under 6.5 percent, which has not been enough to motivate potential homebuyers. We expect rates likely will need to decline another percentage point to generate buyer demand," the economist added.

Over the past several weeks, the housing market has been buoyed by expectations the Fed will start cutting interest rates at its next meeting in September. Cooling inflation readings and a slowdown in the labor market have also bolstered the case for lower rates.

Stocks touched session lows mid-trading Thursday. The S&P 500 (^GSPC) slipped 0.5% while the tech-heavy Nasdaq Composite (IXIC) dropped roughly 1%, erasing early morning gains.

The Dow Jones Industrial Average (^DJI) slipped 0.4%.

The tech sector led the declines as shares of AI chip heavyweight Nvidia (NVDA) dropped more than 2%.

Yahoo Finance's David Hollerith reports:

Challenges keep mounting for TD Bank (TD), making a rough year for the Canadian banking giant even rougher.

The Toronto lender on Thursday reported a third-quarter net loss of $133 million, largely in light of billions the bank set aside to pay for expected fines from an ongoing US investigation into its anti-money laundering practices.

The bank said in a separate filing Wednesday that it set aside an additional $2.6 billion to absorb expected penalties from the investigation, which is led by the Justice Department, on top of another $450 million set aside in April.

Read more here.

Yahoo Finance's Dani Romero reports:

Sales of existing homes rose in July as house hunters returned to the market with mortgage rates at their lowest levels since February.

Existing home sales advanced 1.3% from June to a seasonally adjusted annual rate of 3.95 million, the National Association of Realtors said Thursday, stopping a four-month sales decline that began in March. Economists polled by Bloomberg expected existing sales to hit a pace of 3.94 million in July.

On a yearly basis, sales of previously owned homes dropped 2.5% in July. The median home price climbed 4.2% in July to $422,600, the 13th straight month of annual price increases.

Read more here.

Meta (META) shares climbed more than 1% on Thursday to touch an intraday record. The stock outperformed the rest of the Magnificent 7 stocks during the session.

Shares of the social media platform are up more than 50% year-to-date.

Stocks erased their early morning gains around 10:15 a.m. ET on Thursday.

The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (IXIC) hovered near the flat line after each gaining more than 0.4%.

The Dow Jones Industrial Average (^DJI) dipped into negative territory.

Stocks erased early session gains after the latest economic data released on Thursday showed US Manufacturing PMI fell to 48 in August from 49.6 in July, coming in softer than expected.

Stocks rose slightly on Thursday, with the S&P 500 inching closer to record levels as investors look for clues from the Fed's Jackson Hole symposium on the depth of the likely interest rate cut expected next month.

The S&P 500 (^GSPC) rose 0.3% while the tech-heavy Nasdaq Composite (IXIC) rose 0.5%. The Dow Jones Industrial Average (^DJI) was up 0.2% after the three indexes closed in the green on Wednesday.

In early trading, the S&P 500 was less than 1% away from touching its all-time intraday high set in July.

The Fed's Jackson Hole symposium kicks off Thursday, and investors are on high alert for any shift in tone from the policymakers when Powell speaks at the event on Friday.

Minutes from the Fed's last meeting showed several officials were open to a July rate cut, solidifying the probability of a pivot in September.

Hopes for lower rates have already helped markets recoup all of their losses during a stunning rebound from an early August rout.

Nvidia (NVDA) has been one of the biggest winners of that bounce. On Thursday the stock gained more than 1% following a bullish note from Citi analysts. Wall Street firms have recently reiterated their Buy ratings ahead of the AI chip giant's quarterly results next week.

Nvidia shares have gained roughly 30% since their August lows.