Market recap – US equities close higher
US stock markets ended Wednesday on a positive note, buoyed by easing trade tensions between the United States and Vietnam. A newly announced agreement will reduce proposed tariffs on Vietnamese imports to 20%, down from a prior 46%, helping to reassure investors about global trade risks. Growth-led sectors such as technology and consumer discretionary outperformed, with notable gains in major players like Tesla, Nvidia, Apple, and Alphabet.
Tesla’s shares climbed 5%, despite a 13.5% year-on-year decline in Q2 deliveries, which still came in above the most pessimistic forecasts. Meanwhile, defensive sectors such as health care and utilities lagged, with Centene plunging over 40% after the company withdrew its 2025 forecast due to weak revenue projections.
The Nasdaq rose nearly 1%, the S&P 500 advanced by 0.5%, and the Dow Jones Industrial Average ended relatively flat. Bond markets saw upward pressure, with the 10-year US Treasury yield rising to 4.3%.
Labour market signals weakness ahead of jobs report
Recent employment data shows early signs of a softening US labour market. Investors are closely watching upcoming reports for further clues about the Federal Reserve’s policy direction.
ADP report reveals job contraction
Private payrolls fell by 33,000 in June, marking the first monthly decline since 2023, according to ADP’s employment report. The downturn was largely attributed to weakness in the services sector, while goods-producing industries showed modest improvement.
Despite this contraction, job openings remain elevated, suggesting continued demand for labour. The upcoming non-farm payrolls report, expected today, will be closely watched for further signals. Forecasts anticipate a 115,000 gain in jobs and a slight rise in unemployment to 4.3%.
Global market trends are mixed amid trade and economic uncertainty
Global markets were mixed as investors evaluated ongoing trade negotiations ahead of the July 9 tariff deadline, alongside soft economic indicators from several regions.
Asia-Pacific markets
Asian equities had a mixed session on Thursday. The Nikkei and Hang Seng dropped by 0.2% and 1.2% respectively, while South Korea and the Philippines posted gains. Australia’s ASX 200 lost 0.6%, pressured by weak domestic data.
Europe sees modest gains
The STOXX 600 index rose by 0.2%, led by renewables and luxury goods. France’s LVMH surged 4% on optimism related to the US budget, which favors clean energy. Gains were also seen in the mining, automotive, and banking sectors.
US Dollar and commodities
The US Dollar Index hovered near a three-year low at 96.7, while the euro traded at 1.1788 against the dollar. Oil prices dipped in Asian trading, with Brent down to $68.68 and WTI at $65.58, due to rising US crude and gasoline inventories. Markets also await the next OPEC+ meeting, which is expected to discuss potential production hikes.
Key corporate developments
Several major companies experienced notable share price movements due to earnings, strategic updates, or M&A activity.
Tech and retail
Datadog surged over 10% as it prepares to join the S&P 500, replacing Juniper Networks.
Microsoft will lay off 4% of staff amid rising AI costs, including 200 jobs in its gaming division.
Tesla rose despite lower deliveries, supported by recovering demand in China and Europe.
Nike’s shares rose 4.1% and Under Armour’s gained 1.8% after the US-Vietnam trade deal imposed a 20% tariff on Vietnamese goods and 40% on transshipped items, while granting zero tariffs on US exports to Vietnam.
Strategic acquisitions
Santander will acquire TSB for £2.65 billion, making it the UK’s third-largest retail bank.
Starboard Value revealed a 9% stake in Tripadvisor, sending shares up 7% post-market.
Streaming and media expansion
Netflix is in discussions with Spotify for live music collaborations to boost ad revenue and engagement.
Crypto and Fintech
Ripple applied for a federal banking license and a Federal Reserve master account, intensifying competition with Circle Internet, whose shares fell 8%.
Analyst updates and equity ratings
Analysts issued a mix of bullish and cautious views across sectors, driving market sentiment.
Bullish views
Truist raised Amazon’s price target to $250 on robust Q2 expectations.
Jefferies upgraded Apple to Hold, raising its target to $188.32, citing strong China sales and tariff-induced demand.
Starbucks received a $100 target from Bernstein, projecting a sales rebound and improved margins through 2028.
Cautionary notes
Goldman Sachs issued Sell ratings for Deckers and Crocs amid rising competition and softening demand. Under Armour was rated Neutral.
Bernstein downgraded Lufthansa to “market perform,” citing weaker yields, operational inefficiencies, and a €7.50 target price.
European auto sector
Jefferies initiated coverage on auto suppliers, favouring Autoliv and Forvia. Michelin was highlighted as a top tyre pick, with Volkswagen, Stellantis, and Daimler Truck preferred among OEMs due to restructuring efforts and cyclical tailwinds.
Upcoming economic indicators to watch
Several key data releases today will provide valuable insights into the U.S. economy’s health, particularly in employment and services.
- June Nonfarm Payrolls
- Unemployment Rate
- Average Hourly Earnings
- ISM Services PMI
- S&P Global Services PMI
These indicators will be closely monitored for signs of labour market and service sector momentum.
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