U.S. equities ended the week with solid gains, powered by a surprisingly strong June labour report. Despite the upbeat economic data, investors recalibrated their outlook for interest rate cuts this year. Major indices climbed while Treasury yields and the U.S. dollar also rose, reflecting shifting expectations around Federal Reserve policy.
U.S. Equity market performance
U.S. equities delivered strong returns across major indices during the holiday-shortened week. Investors reacted positively to resilient job market data.
Weekly and daily index movements
- S&P 500 gained 0.8% on the day and 2.0% for the week
- Dow Jones added 0.8% daily and 0.7% weekly
- Nasdaq outperformed, rising 1.0% on the day and 3.5% over the week
While the June labour report beat expectations, it caused investors to revise their outlook on rate cuts. Markets now anticipate 51 basis points of easing in 2024, down from 65 basis points a day earlier. Treasury yields responded by climbing — the 2-year yield rose 10bps, and the 10-year yield added 6bps.
June labour report and Fed outlook
June’s job report showed continued labour market strength, though signs of slowing momentum were visible.
Key employment metrics
- Payrolls increased by 147,000
- The unemployment rate fell to 4.1%
- Private-sector jobs grew by 74,000
The decline in unemployment partly stemmed from reduced labour force participation. Nonetheless, no sharp economic slowdown was evident, pushing expectations for a July rate cut off the table. A possible September rate adjustment is now under consideration by analysts.
Corporate movers of the week
Major companies made headlines with sharp share price moves, driven by earnings, analyst updates, and strategic developments.
Notable stock performances
- Nvidia rose 1%, nearing a $4 trillion market cap
- TripAdvisor surged 16.5% after activist investor interest
- Datadog jumped 15.0% after joining the S&P 500
Global markets update
Here’s a snapshot of recent developments across Asia, Europe, and the currency and commodities markets.
Asia: Mixed trading amid trade tensions
Asian stocks were generally subdued.
- KOSPI dropped 1.6%
- Hang Seng fell 1.2%
- China posted mild gains; Japan was flat; Australia edged up
Renewed U.S. tariff threats ahead of a July 9 trade deadline caused investor caution.
Europe: Modest gains on easing concerns
European indices saw light gains:
- STOXX 600 up 0.3%
- Germany’s DAX rose 0.5%
- France’s CAC 40 climbed 1%
Positive U.S. data and easing trade worries supported sentiment.
U.S. Dollar, oil, and tariffs update
Markets also responded to macro developments in currencies, commodities, and trade policy.
Dollar strengthens on strong jobs data
The U.S. Dollar Index held firm above 97, lifted by reduced recession fears and Fed rate outlooks. The EUR/USD pair slipped to 1.1779.
Oil prices ease as tensions cool
Oil prices dipped slightly:
- Brent: down 0.3% to $68.58
- WTI: down to $66.88
This came amid diplomatic progress between the U.S. and Iran and anticipation of OPEC+ raising production by 411,000 bpd.
U.S. Trade policy takes an aggressive turn
President Trump announced new tariffs on 10–12 countries, ranging from 10–20% and even 60–70%, starting August 1st. This marks a significant shift from prior trade deal ambitions, raising fears of a global trade war.
Equities in focus: Key analyst updates
Equity analysts issued new ratings and forecasts on key companies in tech, semiconductors, and commodities.
Semiconductor sector in the spotlight
- Samsung delays Texas chip factory, dampening ASML’s outlook
- Mizuho Securities raised price targets for:
- Nvidia: $185
- Broadcom: $315
- ARM: $180
- AMD: $152
These upgrades reflect growing demand for AI and data centre infrastructure.
Tech & consumer stocks
- Apple saw 12% YoY App Store revenue growth, led by non-gaming apps
- Bank of America reaffirmed Buy with a $235 price target
- Salesforce: Morgan Stanley kept Overweight, citing pricing changes as catalysts
Mixed ratings in mining and media
- Meta upgraded to Hold by Needham — revenue forecast raised but flagged risks
- Rio Tinto downgraded by Berenberg to “Hold” due to iron ore price pressures
- Roku upgraded by Bank of America to $110 price target, driven by ad momentum and partnership with Amazon
Key economic events to watch
Investors will monitor upcoming economic data releases in Europe for signals on industrial activity and inflation.
Upcoming data releases
- Germany: Factory orders & industrial output for May
- Eurozone: May Producer Price Index (PPI) data, offering insights into inflation trends
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