U.S. stocks rally on economic resilience, rate cut outlook fades
Wall Street climbed to new heights Thursday as a stronger-than-expected jobs report boosted investor confidence in the U.S. economy, even amid trade policy turbulence and geopolitical uncertainty. The S&P 500 rose 0.83% to close at 6,279.35 and the Nasdaq gained 1.02% to 20,601.10 — both closing at record highs. The Dow Jones Industrial Average added 344.11 points, or 0.77%, to finish at 44,828.53.
The Labor Department reported 147,000 new nonfarm payrolls in June, exceeding economist expectations of 110,000 and surpassing May’s revised figure of 144,000. The unemployment rate also improved, dropping to 4.1% versus a forecasted rise to 4.3%.
Rate cut hopes diminish as yields rise
The jobs data prompted a jump in Treasury yields and tempered expectations for rate cuts from the Federal Reserve. According to the CME FedWatch tool, markets now assign a 95% probability that the Fed will hold rates steady at its July meeting.
“There’s no way the Fed’s cutting rates in July,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “And it’s a question mark as to whether rates are cut at all this year.”
The upbeat report came after Wednesday’s ADP data showed a 33,000 drop in private payrolls, briefly stoking concerns that the economy was cooling. Thursday’s official numbers helped ease those fears.
Market eyes tariffs, tax bill as July deadlines loom
President Donald Trump’s announcement of a trade deal with Vietnam provided additional optimism, though investors remain cautious with his July deadline for a broader tariff pause approaching. The White House’s direction on trade policy remains a key variable for markets trading near all-time highs.
Meanwhile, the president’s long-debated tax megabill progressed further, passing the Senate on Tuesday and returning to the House. A final vote is expected soon after the House advanced the bill Thursday.
Weekly gains for all major indexes
Thursday’s shortened trading session, ahead of the Independence Day holiday, capped off a strong week for U.S. equities. The S&P 500 rose 1.7%, the Nasdaq climbed 1.6%, and the Dow posted a 2.3% weekly gain.
