Stocks rallied on both days Federal Reserve Chair Jerome Powell testified in front of lawmakers.

Now, a reading on the labor market will be the latest test for markets.

The February jobs report is set for release Friday morning and is expected to show some signs of cooling after a robust month of job gains shocked Wall Street last month.

The monthly report from the Bureau of Labor Statistics, slated for release at 8:30 a.m. ET, is expected to show nonfarm payrolls rose by 200,000 in February while the unemployment rate remained flat at 3.7% from the previous month, according to consensus estimates compiled by Bloomberg. In January, the US economy added 353,000 jobs, the highest monthly total in a year, while the unemployment rate unexpectedly remained flat at 3.7%.

Here are the key numbers Wall Street will be looking at compared to the previous month, according to data from Bloomberg:

• Nonfarm payrolls: +200,000 vs. +353,000 previously

• Unemployment rate: 3.7% vs. 3.7% previously

• Average hourly earnings, month-on-month: +0.2% vs. +0.6% previously

• Average hourly earnings, year-on-year: +4.3% vs. +4.5% previously

• Average weekly hours worked: 34.3 vs. 34.1 previously

The report will serve as a test of whether January's surprise pickup in job gains was a one-month outlier or a true sign of underlying strength in the labor market. Wages will also be in focus after a surprise pickup in wage growth in January raised inflationary concerns.

"After an overheated surge in January, we expect a cooler, but still solid, pace of job growth in February and expect the spike in earnings growth to be reversed. A report that is stronger than we forecasted would raise the risk that the first Federal Reserve rate cut comes later than May, which is currently our baseline," Oxford Economics lead US economist Nancy Vanden Houten wrote in a note on Wednesday.

Another closely followed index is set to make a new record close.

The S&P 500 equal-weight index (^SP500EW) is on track for its first record-high close since January 2022.

While the traditional S&P 500 (^GSPC) is market-cap weighted, meaning a few large stocks have an outsized impact on the index's performance, the equal-weight index values all 500 stocks in the index equally.

As Goldman Sachs' equity strategy team highlighted in Yahoo Finance's Chartbook back in January, this led to outsized gains for the market-weighted index and a lower valuation for the equal-weighed index.

Many on Wall Street believed this could lead to a broadening out of the stock market rally, rather than a few "magnificent" stocks dominating gains. And Thursday's market action is the latest sign that narrative may be coming to fruition.

"Market “narrowness” — i.e., only a handful of stocks doing all the work — is no longer an accurate read on things," Baird investment strategy analyst Ross Mayfield wrote in a note to clients on March 1.

This could be crucial for the 2024 stock market rally as hiccups in the Magnificent Seven trade develop, most recently with slides from Apple (AAPL) and Tesla (TSLA). Strategists believe strength in other areas could be where the market finds support if the tech trade lags.

"The strength we're seeing in the economy and in corporate America is much broader based than just the AI trade that has captured so much attention recently," Goldman Sachs equity analyst Ben Snider told Yahoo Finance, pointing to the wide base of earnings growth seen during fourth quarter reports.

Oppenheimer's John Stoltzfus proposed a similar point in a weekly note to clients on Sunday. He highlighted the building broad-based strength is why he doesn't think the rally is over.

"There’s likely room for a further broadening of this year’s stock market rally and opportunity to see equities further climb the proverbial wall of worry," Stoltzfus wrote.

Federal Reserve Chair Jerome Powell testified in front of lawmakers over the past two days and answered many questions regarding a new controversial rule requiring big banks to hold greater buffers against future losses.

Powell and FDIC Chair Martin Gruenberg both said Thursday they anticipate changes to the rule following pushback from lenders, community groups, Republicans, and even some Democrats.

Yahoo Finance's David Hollerith and Jennifer Schonberger report:

Powell told Senate lawmakers that "I expect there will be material and broad changes," and "we won’t hesitate" to re-propose the rule if it makes sense — repeating a point he made to House lawmakers Wednesday.

Gruenberg told reporters separately, "I certainly think we anticipate making changes in the final rule based on the extensive comments that we've received."

The concerns about the capital rule — the most aggressive change to how banks are regulated since the aftermath of the 2008 financial crisis — range from harm it could do to the US economy to ways in which it would reduce access to mortgages for disadvantaged home buyers.

The willingness of regulators to change what they already proposed highlights the increased sway that big banks have in Washington, a sharp contrast to the harsh political scrutiny they received in the aftermath of the 2008 financial crisis.

"We also see this as potentially marking an important inflection point whereby the regulatory burden levied on the largest banks" after the 2008 crisis "could be nearing a peak," Ebrahim Poonawala, a bank analyst for Bank of America, said in a note this week.

The S&P 500 (^GSPC) is once again pressing toward a record-high close on Thursday, raising the question of whether stocks are reaching overvalued levels.

But one of the key things supporting stocks, even at stretched levels, is margin growth. Truist co-chief investment officer Keith Lerner first highlighted this to us in the second volume of the Yahoo Finance Chartbook back in January.

Lerner described it as a key question for investors in 2024 when he submitted the chart below in January.

With fourth quarter earnings season nearly over, Fidelity director of global micro Jurrien Timmer noted the margin story is off to a good start for 2024 in a post on X Thursday.

"While valuations are getting stretched, the improving margin story seems to be making up for it," Timmer wrote.

Stocks were higher on Thursday and techs took the lead again with the Nasdaq Composite (^IXIC) gaining as much as 1.4%, while the S&P 500 (^GSPC) added almost 1% to touch record highs during the session. The Dow Jones Industrial Average (^DJI) gained 0.5%.

On a sector basis, the Communications Services (XLC), Technology (XLK), and Materials (XLB) sectors led the charge, all rising over 1%.

New York Community Bankcorp (NYCB)

The stock gained 7% on Thursday after the regional lender cut its dividend to one penny per share as part of its overhaul plan. New York Community Bancorp said it lost 7% of its deposits over the last month. The disclosure came one day after the lender announced a new CEO and a capital raise from a group led by Steven Mnuchin, the former US Treasury Secretary and Goldman Sachs partner.

Victoria's Secret (VSCO)

Shares of the lingerie maker sank as much as 30% during the session after the company's sales guidance came in short of analyst expectations. Victoria's Secret is forecasting net sales to be about $6 billion this year, or down low single digits compared to last year.

Meta (META)

The social media giant was among the top five trending tickers on Yahoo Finance on Thursday. The stock touched new highs. Meta shares are up about 44% year to date. The stock is the second-highest performer this year among the "Magnificent Seven" group behind Nvidia (NVDA), which is up 85% during the same period.

Yahoo Finance's Dani Romero reports the housing market's spring selling season could be more robust this year as inventory picks up steam. However rising rates cut keep buyers on the sidelines.

New research from Realtor.com shows that the number of homes actively for sale in February jumped 14.8% compared to the same month last year. That’s the fourth consecutive month of increases for homes listed for sale on the market.

"The fact that we're starting the year with more homes for sale than we've seen on the market since 2020 is a really good step," Danielle Hale, chief economist of Realtor.com, told Yahoo Finance in an interview.

Inventory is still down nearly 40% compared to pre-pandemic levels. Meanwhile borrowing costs are ticking back up. The average for a 30-year fixed loan was 6.94% as of last Thursday, up from 6.9% the prior week, according to Freddie Mac data.

Read more here.

Gold (GC=F) extended its rally hovering near its all-time high as Fed Chair Jerome Powell reiterated policymakers' intention to cut rates this year, provided inflation data comes in as expected.

The precious metal rose for the fifth day, touching a record past $2,170 per ounce before paring gains. Futures were trading just around $1,162 by 11:00 a.m. Eastern.

The precious metal tends to rise when interest rates head south and the US dollar eases. On Thursday morning Fed Chair Jerome Powell reiterated to lawmakers the central bank's intention to lower rates later this year, provided inflation data comes in as expected.

The greenback edged lower on Thursday, supporting a higher price for the commodity invoiced in US dollars.

Nvidia (NVDA) stock gained more than 2% on Thursday, touching new all-time highs. Shares of the AI darling surpassed the $900 level to hit a peak of $909.92 each during the morning session.

Nvidia is up 88% year to date. The semiconductor giant has been the best performer among the "Magnificent Seven" stocks this year.

Social media giant Meta (META) also hit new highs on Thursday. The stock is up 46% year to-date.

The major averages gained on Thursday ahead of Fed Chair Jerome Powell's second day of testimony before congress.

The Nasdaq Composite (^IXIC) rose 0.7%, while the S&P 500 (^GSPC) gained 0.6%. The Dow Jones Industrial Average (^DJI) also ticked up 0.5%.

The rise comes a day after Jerome Powell was questioned by lawmakers on the economy and monetary policy. Powell reiterated that policymakers are in no rush to ease policy, but rate cuts are likely to come this year. Friday's jobs report will provide investors with clues on the timeline for when rate cuts could come.

Meanwhile, bitcoin (BTC-USD) hovered above $67,000 on Thursday after hitting fresh highs earlier this week.

New York Community Bancorp (NYCB) lost 7% of its deposits over the span of a month, underscoring the challenges facing a new investor group led by Steve Mnuchin as it outlined its turnaround strategy Thursday.

Yahoo Finance’s David Hollerith reports the bank’s disclosure in an investor presentation shows total deposits had dropped to $77.2 billion as of March 5, compared with $83 billion that it had on Feb. 5.

Roughly 80% of its deposits are currently backstopped by insurance from the Federal Deposit Insurance Corporation, while 20% are uninsured. It lost a = total of $7.8 billion in uninsured deposits over the last month.

The disclosure came one day after NYCB made a dramatic attempt to regain investor confidence by announcing a new CEO and a $1 billion infusion from a group led by Mnuchin, a former US Treasury Secretary and Goldman Sachs partner.

NYCB shares were relatively flat in pre-market on Thursday after popping more than 7% in the prior session.

Read more here.

Maybe it's time to revisit the Microsoft (MSFT) sell-off.

Over the last 25 trading days, Microsoft shares are off by 0.4% compared to a 4% advance for the S&P 500. The broader Mag Seven have been trading on the shaky side of late, and Microsoft hasn't been immune.

Some new projections from Evercore ISI analyst Kirk Materne on Microsoft's AI opportunity could reawaken the bull case.

Here's what he said in a new note to clients today:

"When aggregating our bottoms up Gen AI analysis and taking a five year view, we now estimate Gen AI could drive ~$82.5 billion in incremental revenue in CY28 for Microsoft based on our ‘base case’ scenario, which represents a 24% uplift to our CY28 revenue estimate (assuming a 9% revenue CAGR from ’23-’28 for ‘core’ Microsoft). This would also represent $5.10 in incremental EPS assuming a 45% incremental net margin – just below incremental margins in prior years. Our ‘bull case’ scenario indicates an incremental revenue opportunity of $142.8 billion and $12.07 in incremental EPS. Our updated CY27 incremental AI revenue estimate of $54.6 billion is $4.2 billion higher than our prior ‘base case’ forecast from June 2023. Bottom line: The AI monetization opportunity is off to a good start but we are still in the very earnings and based on our analysis, we expect Gen AI will keep an upward bias on Microsoft’s revenue and EPS estimates for the foreseeable future."

Materne rates Microsoft at Outperform with a $475 price target, 17% above current levels.

All aboard.

The Deutsche Bank team is out with a note today looking at five reasons why bitcoin prices have a lot more room to run. It's too early in the day to put you back to sleep by detailing all five reasons, so let me zero in on one: April's potential bitcoin halving event.

The investment bank is calling attention to the bullish action in bitcoin around prior halving events:

"In the 30 days prior to the November 2012 halving, prices rose by 5%. A more substantial 13% gain was seen ahead of the July 2016 event. Most recently, there was a sizable 27% price increase in the month before the May 2020 halving."

A helpful timeline chart to see how this has historically played out: