Continuing jobless claims also decreased for the week ended May 21, down 34,000 from the prior week's revised print to total 1.309 million. This marked the the lowest level for unemployment since December 1969.

Stocks rebounded from earlier losses on Thursday as investors shook off a weak outlook update from Microsoft (MSFT  ) and worries about economic growth. The Dow Jones Industrial Average rose over 400 points, while the S&P 500 and Nasdaq Composite climbed 1.8% and 2.7%, respectively.

Microsoft shares fell after market open after the tech giant lowered its profit and revenue outlook, citing headwinds from changes in foreign exchange rates, echoing other macroeconomic concerns raised by other companies.

"We expect other income and expense to be negative $50 million reflecting FX remeasurement impact based on market conditions in April," said Amy Hood, chief financial officer at Microsoft, in the company Q3 earnings call in April. "Similar to the rest of our guidance, further equity and FX movements through Q4 are not reflected in this number."

Here's how the market settled on Thursday:

S&P 500 Index (SPY  ): +1.33% or +435.05 points to 33,248.28

Dow Jones Industrial Average (DIA  ): +1.84% or +75.59 points to 4,176.82

Nasdaq Composite Index (QQQ  ): +2.69% or +322.44 points to 12,316.90

Private payrolls grew at a less-than-expected rate in May:

The U.S. private sector added fewer-than-expected jobs last month, signalling labor demand may be slowing amid tighter financial conditions.

Private sector payrolls grew by 128,000 in May, according to ADP's monthly report published Thursday, falling from April's downwardly revised increase of 202,000. Consensus economists were expecting payrolls to grow by 300,000, according to Bloomberg.

"Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels," said Nela Richardson, chief economist at ADP, in a press statement. "The job growth rate of hiring has tempted across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late."

Jobless claims fall to 200,000 in tight labor market:

Initial jobless claims unexpectedly fell in the latest weekly data as labor market conditions remain tight amid mounting concerns that an economic slowdown is on the horizon.

First time unemployment claims totaled 200,000 for the week ended May 28, according to the Labor Department's report published Thursday, down 11,000 from the previous week's revised print. This reading also come in below the 210,000 consensus economists expected, according to Bloomberg.