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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
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4 min read
Dow approaches new record and S&P hits all-time high after
stronger-than-expected jobs data
By John Towfighi, CNN
Updated:
1:25 PM EDT, Thu July 3, 2025
Source: CNN
Stocks, bond yields and the dollar gained on Thursday after a strong
jobs report soothed nerves about how the economy is faring during the
early stages of President Donald Trump’s tariff campaign.
After a shortened trading day in advance of Friday’s July Fourth
holiday, the Dow closed higher by 344 points, or 0.77%. The broader
S&P 500 rose 0.83% and the tech-heavy Nasdaq Composite gained 1.02%.
The S&P 500 and Nasdaq closed at fresh record highs. The Dow closed
just 186 points away from hitting an all-time high.
Stocks had jumped higher in the morning after new data showed the
economy in June, exceeding expectations. The unemployment rate ticked
lower to 4.1% from 4.2%.
The strong headline numbers provided relief for investors who were
nervous about a potential slowdown in the economy as the president’s
tariffs portend to impact business activity.
“The June jobs report is like a summer blockbuster — plenty of
action and a surprise twist. Despite tariffs, DC drama and global
headwinds, the US labor market just pulled off a better-than-expected
performance,” Gina Bolvin, president of Bolvin Wealth Management
Group, said in an email.
While markets jumped higher, investors also noted caution. The
breakdown of job growth showed with the private sector showing signs of
weakness, according to Jim Baird, chief investment officer at Plante
Moran Financial Advisors.
“There was one cautionary note,” Baird said. “Private sector
hiring was fairly weak. So, that’s the asterisk that I would put on
the report, and something to watch.”
Job growth in June across sectors. Meanwhile, the average duration of
unemployment rose and the share of unemployed workers who have been out
of a job for 27 weeks or longer edged closer to a three-year high.
“Businesses are a little bit more hesitant to hire,” Baird said.
“Lots of questions still related to the impact of trade, tariffs and
the tax code making its way through Congress. I think there has been a
cautious tone on the hiring front that we’ve been seeing and hearing
about for some period of time. And I think that did show up in the
numbers this month.”
Treasury yields jumped higher as investors dialed back expectations for
future rate cuts from the Federal Reserve. The 10-year yield rose to
4.34% and the 30-year yield rose to 4.86%.
The US dollar index, which measures the dollar’s strength against six
major foreign currencies, gained 0.45%. The dollar index was set for
its biggest daily gain in nearly two weeks.
David Russell, global head of market strategy at TradeStation, said in
an email that the June jobs report was “good news for the economy and
corporate earnings because there’s no sign of a recession.”
“Uncertainty around tariffs and trade have apparently not spooked
businesses into shedding workers,” Jeffrey Roach, chief economist at
LPL Financial, said in an email. “One note of caution: the
administration is still actively negotiating details with several major
trading partners and the eventual business impacts are unknown.”
The Dow, S&P 500 and Nasdaq all closed the week in the green.
Strong jobs growth dashes hopes for Fed rate cut in July
The labor market continues to prove resilient, which gives the Fed more
time to hold rates steady and focus on how inflation is developing.
Traders now expect just a 4.7% chance the Fed cuts rates in July, down
from a 23.8% chance yesterday, according to the CME FedWatch Tool.
The Fed’s rate-cutting path has come under increased scrutiny in
recent weeks as Trump has against Fed Chair Jerome Powell, lashing out
at him for holding rates steady. Some Fed officials in recent weeks had
signaled an openness to cutting rates in July.
Seema Shah, chief global strategist at Principal Asset Management, said
in an email that the June jobs report signals rate cuts in July are
likely off the table.
“A few Fed speakers have shown their inclination to cutting interest
rates as early as this month. Today’s data of higher than expected
payrolls, a drop in the unemployment rate and a fall in jobless claims
completely dispels their case for imminent rate cuts and implies that
there is absolutely no urgency for Fed support,” Shah said.
All eyes on Washington
Wall Street was also as lawmakers in the House try to pass Trump’s
“One Big, Beautiful Bill.” And investors were also keeping an eye
out for developments on the trade front. Trump on Wednesday with
Vietnam.
“The stock market is starting off the second half of 2025 on a strong
foot, with stocks continuing to make record highs as investors start to
price in fading tariff uncertainty and optimism over tax cuts and
continued economic resiliency,” David Laut, chief investment officer
at Abound Financial, said in an email.
Chris Zaccarelli, CIO at Northlight Asset Management, said in an email
that while he has been encouraged by the recovery in the stock market
in recent months, he is concerned about expensive valuations and the
fact that a lot of good news has already been priced in, leaving the
market “more vulnerable to negative surprises.”
“Extreme greed” was the sentiment driving markets, according to
CNN’s . It was the strongest reading in over a year.
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