US stock markets achieved new record highs on Thursday amid a positive response to a stronger-than-expected jobs report for June. The S&P 500 and Nasdaq Composite both reached all-time highs for the third time within the week, rising approximately 0.8% and 1% respectively, while the Dow Jones Industrial Average saw an increase of over 0.7%, coming closer to its previous record.
The employment data revealed that the economy added 147,000 jobs in June, surpassing forecasts of 106,000. Additionally, the unemployment rate decreased unexpectedly to 4.1%, with May’s payroll numbers also being revised upwards.
This data, which suggested a more resilient labor market, hampered expectations for an imminent interest-rate cut by the Federal Reserve. Investors had been anticipating a reduction in rates due to prior signs of a softening job market, but the recent report tempered those hopes, diminishing the likelihood of a rate cut in July.
In the political arena, President Trump’s ongoing tensions with Federal Reserve Chair Jerome Powell have heightened discussions regarding potential future rate cuts. Trump recently called on Powell to resign in a social media post, escalating the pressure from the White House.
Moreover, investors are closely monitoring developments regarding international trade as the deadline for resuming tariffs approaches on July 9. Trump’s deal with Vietnam has contributed to a more optimistic market outlook, alongside recent steps to ease restrictions on exports of chip design software to China, signaling a potential thaw in trade relations between the two largest economies. As a result, shares of leading chip design firms jumped in premarket trading.
In legislative news, President Trump’s significant tax and spending bill is advancing toward a final vote in the House, with promising support from Republican leaders to secure its passage by the set deadline of July 4.
As the US stock market trading wrapped up early on Thursday in observance of Independence Day, the outlook remains cautiously optimistic for both economic recovery and continued legislative progress.
This surge in stock prices, bolstered by solid economic indicators and legislative momentum, suggests that investors remain confident in ongoing growth potential, especially as the country navigates its economic landscape.