The S&P 500 Index ($ SPX) (SPY) turned off 0.83%on Thursday, Dow Jones Industries Index ($ Dowi) (Dia) +0.77%shut down, and NASDAQ 100 Index ($ IUXX) (QQQQ) +0.99%. September E-Mune S&P Fuxures (ESU25) increased +0.77%, and September e-mine nashedac futures (NQU25) increased +0.95%.
The stocks were supported by the expectation of Thursday’s strong US unemployment report, which raised hopes for constant solid US economic development. However, the shares were increased to 4.35% as a 10-year T-Note after the unemployment report. In addition, the possibility of cut rate cut in the next meeting on 29-30 July fell from 23% to 5% on Wednesday.
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The House passed the Senate reconciliation bill on Thursday afternoon, sent it to President Trump for its signature. Nonpartison Congress’s budget office estimates that the bill will add about $ 3.3 trillion to the US budget deficit in the next decade. The fiscal stimulation from the bill would be a pure positive for the American economy, but high deficit also increases the risk of final debt crisis in the United States.
The approved reconciliation bill included an $ 5 trillion debt roof growth, thus averaging the treasury default that was without late summer or early autumn without a loan roof growth. The debt sealing hike is designed to live in 2027, which means that the markets will not have to worry about the issue in the next two years.
Meanwhile, the Trump administration’s campaign against Fed Chair Powell continued to cut the interest rates, as Treasury Secretary Scott Besent said in an interview on the Fox business on Thursday morning that Fed appears to be “slightly closed” on its interest rate setting process as the yield of 2-year T-Note was below 3.76%at the time of their interview, which was below the boundary of Feder. However, the yield of 2-year-old T-Rots then increased to 3.88% from a stronger-up to 3.88% after the expectation of US unemployment reports.
The Treasury Yield curve is inverted with a high-altercation rates, as Fed has continued fighting with high post-covid inflation environment and new inflation pressure with President Trump’s tariff. Any artificial attempt to cut interest rates below ideal levels can lead to severe inflation pressure and move upward upwards in short -term interest rates, possibly triggering a recession.
Mr. Besant also said that the administration has expected to fill two vacant fed seats next year, meaning that the administration is expecting that Jerome Powell will leave the fed completely after leaving the post in May 2026, even though his separate word as a fed governor does not end until January 2028.
Business talks are in attention before the July 9 deadline to implement mutual tariffs. The European Union aims to reach an agreement with the US in principle with the US by the time limit of July 9, according to the comments made by the European Union President Ursula von Der Leyen on Thursday. He said that there is no way that a full trade agreement can be signed till 9 July. In the news of other trade deal, President Trump said on Wednesday that the US had reached a trade agreement with Vietnam. President Trump said on Tuesday that there is no possibility of a business deal with Japan, so the country is most likely 30%, 35%, or “whatever number is that we determine.”
Thursday’s June-form payroll report was stronger than expectations of +106,000 of +147,000. The parole’s report came as a surprise, given that the markets were lashed out for a weak report on Wednesday, which after the news of a decline of -33,000 in the US June ADP employment report, which marked the first decline in 2.25 years. In June, strong-to-intake payroll growth was inspired by the increase in employment in state and local governments including public education. In contrast, only +74,000 increased, suggesting the weakness of the labor market outside the private payroll state and local governments. June manufacturing payroll -7,000 fell to matches of May. April-May parole had a pure upward amendment of +16,000.
The US unemployment rate of June dropped from -0.1 points to 4.1%, also indicating a strong labor market compared to expectations for an +0.1 point increase. The June unemployment rate of 4.1% is above the 8-skeletal level of 3.4% posted in April 2023.
In some positive news for inflation approaches, the average of June earnings per hour +0.2% m/m and +3.7% increased, +0.3% m/m and + +3.8% weaker than expectations and +0.4% m/m and +3.9% y/y of May.
Early unemployment claims fell from -4,000 to 233,000, showing a strong labor market compared to the expectations of 241,000. Constant claims were unchanged at 1.964 million, showing a slightly weak labor market compared to the expectations of 1.962 million.
May US trade deficit -slightly larger than the expectations of $ 71.5 billion -$ 71.0 billion, and amended April -above $ 60.3 billion. Exports may have fallen -4.0% m/m. May import -0.1% m/m fell, April K -16.3% joined the dip.
The June ISM US Services Index increased from 49.9 to 50.8 in May, which grew more than expectations for an +0.7 point increase. Payment of prices of June ISM services increased from 68.7 to -1.2 points in May to 67.5 in May, +0.2 points weaker than expectations for an increase of 68.9.
The final -zoon S&P US services PMI was revised slightly less than the 53.1 preliminary report from the preliminary report of 53.1, which was weakened by expectations for an unpleasant report of 53.1. The final-June S&P US Composite PMI was modified from 52.8 to 52.8 to 52.9, stronger than expectations for an unpublished report of 52.8.
The May US factory order represented the rebellion of -3.9% after the +8.2% m/m and May revised decline. The order of pre-transportation in the orders of the US factory may be in line with the market expectations, +0.2% meter/meter.
The negative side has the upcoming income season for shares, which begins next week. Bloomberg intelligence data suggests that S&P 500 companies have a consensus for the C2 income +2.8% year-to-year growth, which is the smallest growth in two years. In addition, only six of the 11 S&P 500 regions are estimated to post the lowest increase in the lowest income increase since the Yardney Research, according to Yardney Research.
Prices of Federal Fund Futures are exempting the possibility of 5% for cutting 25 BP rate in July 29-30 FOMC meeting.
Foreign stock markets shut down higher on Thursday. Euro Stoxx 50 off +0.46%. China’s Shanghai Composite +0.18%shut down. Japan’s Nikkei Stock 225 off +0.06%.
Interest rates
September 10-Year T-Nots (Znu25) fell on -13 ticks on Thursday. The yield of 10-year T-Note +6.9 BP increased to 4.346%. The T-Note prices fell rapidly after the US payroll and unemployment rate reports, which was shown in a strong-to-the-tomed US labor market to reduce the fed rate cuts earlier this month. The T-Note market was reduced as the house had moved towards the passage of the reconciliation bill during the day, which, according to the CBO, would increase the US budget deficit to a total of $ 3.3 trillion in the next 10 years, thus the treasure needed to sell more loans to meet the deficit. The T-Note prices also decreased as 10-year-old Breekwane’s inflation hopes increased by +2.6 bp to high 2.339%of 2-week high.
In a recession factor for T-notes, Atlanta Fed President Bick on Thursday called for a unchanged monetary policy due to tariff uncertainty and a flexible economy.
European government bond yields decreased. 10 -year -old German Bund yield -4.9 BP fell to 2.615%. 10 -year -old UK gilt yield -7.1 BP fell to 4.542%.
In the July 24 policy meeting, Swaps are giving exemption to 6% possibility for cutting -25 BP rate cut by ECB.
US Stock Movers
Stock saw support with strength in brilliant seven shares, except for Tesla (TSLA), the higher shutdown, which showed a small decline. Mag 7 stocks that increased more than +1%, including Microsoft (MSFT), Amazon (AMZN), and NVIDIA (NVDA).
Chip shares also showed strength, headed under the leadership of +2.4% rally in Intel (INTC). Meanwhile, all closed all +1% on Broadcom, Semicanduers (ON), NVDIA (NVDA), and Marvell Technology (MRVL).
The crip design software in China by the Trump administration raised the US export license requirements for sale, Sinopsis (SNP) and Taal Design (CDNS) +shut down more than 4%, allowing those companies to resume sales software in China.
ASML (ASML) fell after a report in Nikkei Asia that has fallen to the construction of a chip factory in Texas due to low demand for chip production of Samsung electronics plant. Samsung is installing the ASML factory production equipment at that plant.
Fedex (FDX) BNP Paribas exane +0.8% shut down after double upgrade, stating that the stock is oversold and hopes that Fedex will continue to improve its competitive UPS.
After S&P Datadog (DDOG) +has closed more than 14%, announced that it would replace Junipar
Network in S&P 500, effective at the opening of trading on 9 July.
The OLO (OLO) shut down more than +13% after the news that private equity firm Thoma Bravo Restaurant will receive the software provider in cash $ 10.25 per share.
Earning Report (7/7/2025)
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On the date of publication, Rich Escpland did not have the positions mentioned in any securities mentioned in this article (either direct or indirectly). All information and data in this article is only for informative purposes. For more information, please see the Barkart Disclosure Policy here.
The idea and opinion expressed here are the idea and opinion of the author and not necessarily Nasdac, Inc.
