Looking at the recent news about the stock market in the United States, we have come across a spike in US stocks on Wednesday, 2nd July. As positivity concerning the US trade deals soared high at the same time, more signs of a labor market slackening bolstered the scenario for the Federal Reserve to start slashing interest rates.
As per the Yahoo Finance report, the Dow Jones Industrial Average was just below the flat line. Whereas the S&P 500 soared nearly 0.5%, closing at 6,277.42, an all-time high. The Nasdaq Composite moved higher by 0.9%, also closing at a record amount of 20,393.13. Tesla shares rose after the electric vehicle maker exceeded the expected global production in the second quarter, even though sales plunged. Additionally, Apple’s stock climbed high after an upgrade from Jefferies analysts.
S&P 500 and Nasdaq moved firmly higher on Wednesday after US President Trump announced a trade deal with Vietnam, uplifting hopes of investors that more agreements can occur before the July 9 tariff pause deadline. Meanwhile, the labor market showed more signs of a slowdown in June. Data from Automatic Data Processing (ADP) has shown that US private employers have suddenly slashed 33,000 jobs in June, missing expectations of around 98,000 jobs added. June remained the first month of job losses in the private sector in more than two years.
The data lays the foundation for the release of the June US jobs report on Thursday. The job report is seen as a prime factor for the Fed, as investors predict a cut in interest rates. However, the majority of Fed watchers still do not expect the central bank to slash rates in July. But almost all watchers are predicting a cut in interest rates by September, with over 20% cuts in today’s pricing.
S&P 500, Nasdaq Stocks Move Higher Ahead of Jobs Report
As we have already seen that US stocks have moved higher as the potential of US trade deals soared at the same time, signifying a more slackened labor market that could compel the Federal Reserve to start cutting interest rates. Now, all eyes are on jobs ahead of the 4th of July. Investors expected the June jobs report to showcase slowed hiring and a heightened rate of unemployment. The release of the report will come as investors are eager to watch for any further signs of slackening in the US labor market amid the debate over when the Federal Reserve will start cutting interest rates next.
Looking at the US stock market today, the Bureau of Labor Statistics data is scheduled for release at 8:30 a.m. ET on Thursday, 3rd July. According to the consensus estimates compiled by Bloomberg, economists expect a rise of 110,000 nonfarm payrolls in June and the unemployment rate to have risen to 4.3%.
“We think labor demand is slowing, but so far the slowdown is modest,” shared Morgan Stanley Chief US Economist Michael Gapen.
Looking back at May, the US economy added 139,000 jobs in its jobs report, and the unemployment rate remained flat at 4.2%. As per Bloomberg, below are the statistics Wall Street is expecting to see in the jobs report on Thursday:
- Unemployment rate: 4.3%
- Nonfarm payrolls: +110,000
- Average weekly hours worked: 34.3
- Average hourly earnings, month over month: +0.3%
- Average hourly earnings, year over year: +3.8%
The Chaos in the 2025 Stock Market Rally
In the middle of 2025, the S&P 500 is at an all-time high and has profited by over 6%. Sectors like Technology (XLK), Communication Services (XLC), Utilities (XLU), Industrials (XLI), and Financials (XLF) gained more than 8% in the initial six months of the year.
Despite the chaotic nature of the first half of 2025, these returns are assumed to be underrated, even with such high returns on investments. Exhibit A co-founder Matt Cerminaro highlighted in a research study that both the Tech and Communication Services sectors fell by 22% from their recent high this year.
However, with both sectors being among the best performers of the year, this market action is a significant example of the biggest losers amid a market downturn often later emerging as the biggest winners off the bottom. “Volatility is the price of admission” for investors looking for long-term gains in the stock market.
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