These 2 Surprising Stocks Led Markets Higher Thursday

The eyes of market participants have been focused on Jackson Hole, Wyoming, as investors prepare to hear what Federal Reserve Chairman Jerome Powell says about the current state of the economy and the monetary policy that the central bank intends to pursue.

Earlier in the week, concerns about what that speech could bring sent the Dow Jones Industrial Average (^DJI -0.98%), S&P 500 (^GSPC -0.46%), and Nasdaq Composite (^IXIC -0.64%) lower. But major market indexes rebounded by 1% to 2% on Thursday as those fears eased.

Data source: Yahoo! Finance.

Blue chip stocks were at the forefront of many investors' minds as the market moved higher. However, a couple of smaller stocks made surprisingly substantial contributions to the bullish move. Below, you'll learn more about why Figs (FIGS -0.21%) and Pinterest (PINS -0.64%) saw big increases in their share prices today.

Figs gets a mention

Shares of Figs moved higher by 18% on Thursday. The jump came as a well-known billionaire gave investors a reminder of the prospects for the maker of medical clothing.

Baron Capital founder Ron Baron gave an interview on CNBC in which he discussed his investment in Figs. Characterizing Figs as the "Lululemon of healthcare," Baron said that he had invested about an additional $100 million in the stock.

Baron has been invested in Figs for quite a while, and he believes that the company has staying power. Even though some of Figs' recent share-price declines have come due to short-term pressure from issues like supply chain dysfunction, higher marketing expenses, and rising costs for materials and other inputs, Baron believes that those problems are transitory in nature. With brand awareness that is largely organically grown, Figs could scale up its margins and cash flow as it grows, and Baron is pleased that management is highly invested in the stock and the financial future of the company.

Figs' latest earnings report earlier this month showed continuing demand and resiliency in a tough market environment. If Baron is right, then the recovery that Figs has started could keep going for a long while to come.

Pinterest jumps despite possible investigation

Social media stock Pinterest picked up 14% on Thursday. The surprising thing about the rebound for the company was that it came amid news that might have been seen as more negative than positive.

Pinterest is reportedly under investigation from California regulators, who are looking at allegations from former employees of the company. The California Civil Rights Department could look more closely at claims of racial discrimination, with assertions that female workers were paid less than male workers and that compensation for employees of certain racial groups was lower than for others.

Beyond the investigation, though, Pinterest has earned some positive sentiment from investors who favor its characteristics over those of social media peer Twitter (TWTR). With the microblogging website still embroiled in takeover drama, the image-based Pinterest offers a less controversial pick that still stands to benefit if it can improve its monetization and avoid a downturn in advertising revenue.

Investors across the social media space have been concerned that a recession could lead to reduced marketing spending by businesses, which in turn would hurt Pinterest's efforts. However, with the stock still down by 70% from its highs in early 2021, there's a lot of room for Pinterest stock to recover if it can establish a longer-term upward trajectory for its revenue and profits.