Major Indexes Surge on Strong Jobs Data Before Independence Day Closure
The S&P 500 and Nasdaq Composite closed at fresh record highs on Thursday, July 3rd, as investors reacted positively to better-than-expected employment data ahead of the July 4th holiday. At the market open, major indexes continued their upward momentum from the previous session, with the S&P 500 rising 0.83% to close at an all-time high of 6,277.42, while the tech-heavy Nasdaq gained 1.02% to finish at a record 20,393.13.
The Dow Jones Industrial Average climbed 344 points, or 0.77%, closing just 186 points shy of its all-time high.
Jobs Report Exceeds Expectations, Easing Recession Fears
Thursday’s market rally was fueled by the June jobs report, which showed the economy added 147,000 jobs, surpassing analyst expectations. The unemployment rate improved slightly, ticking down to 4.1% from 4.2% in May.
“The June jobs report is like a summer blockbuster — plenty of action and a surprise twist. Despite tariffs, DC drama and global headwinds, the US labor market just pulled off a better-than-expected performance,” said Gina Bolvin, president of Bolvin Wealth Management Group.
However, analysts noted some caution beneath the headline numbers. Jim Baird, chief investment officer at Plante Moran Financial Advisors, pointed out that “private sector hiring was fairly weak” and that businesses appear “more hesitant to hire” amid uncertainty around trade policies and pending tax legislation.
Fed Rate Cut Expectations Shift After Strong Data
The robust jobs report has slightly altered market expectations for Federal Reserve interest rate cuts. Treasury yields jumped higher as investors recalibrated their outlook, with the 10-year yield rising to 4.34% and the 30-year yield climbing to 4.86%.
According to CME Group’s Fedwatch tool, traders are now attaching a 25% chance of the Federal Reserve cutting rates at the July meeting, up from about 20% a week ago.
Major Stock Movements and Corporate News
Tech Giants Lead the Way
Apple (AAPL) shares rose after receiving an upgrade from Jefferies analysts, while Tesla (TSLA) climbed after reporting it produced more vehicles globally than expected in the second quarter, despite a significant drop in sales.
Meanwhile, Nvidia (NVDA) reached a staggering market value of $3.92 trillion on Thursday, potentially becoming the most valuable company in history. The AI chipmaker surpassed Apple’s previous record closing value of $3.915 trillion from December 2024. Microsoft (MSFT) currently holds the second spot with a market capitalization of $3.7 trillion, while Apple sits in third place at $3.19 trillion.
IBM Outperforms Tech Giants
In a surprising development, International Business Machines (IBM) has quietly outpaced the gains of the “Magnificent 7” stocks on a year-to-date basis. IBM has returned 32.75% YTD, significantly outperforming Nvidia’s 15.20% gains and the other tech giants. The company’s generative AI business has surpassed $5 billion since its inception, demonstrating strong customer demand.
Other Notable Movers
Chip design software firms Synopsys (SNPS) and Cadence Design Systems (CDNS) saw significant gains, climbing 6.7% and 5.9% respectively in premarket trading after the U.S. lifted export restrictions on chip design software to China, signaling a potential thaw in trade tensions between the world’s two largest economies.
Tripadvisor (TRIP) climbed 4.9% after the Wall Street Journal reported activist investor Starboard Value had built a more than 9% stake in the online travel firm.
Trade Developments and Economic Policy
Markets received a boost from President Trump’s announcement of a trade deal with Vietnam, which has lifted investor hopes that more agreements will come before the July 9 tariff pause deadline.
Meanwhile, Republicans in the U.S. House of Representatives advanced President Trump’s massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost. The legislation is expected to add $3.4 trillion to the nation’s $36.2 trillion in debt over the next decade, according to nonpartisan analysts.
Market Sentiment and Outlook
Market sentiment remains strongly positive, with CNN’s Fear and Greed index showing “extreme greed” driving markets—the strongest reading in over a year.
“The stock market is starting off the second half of 2025 on a strong foot, with stocks continuing to make record highs as investors start to price in fading tariff uncertainty and optimism over tax cuts and continued economic resiliency,” said David Laut, chief investment officer at Abound Financial.
However, some analysts urge caution. Chris Zaccarelli, CIO at Northlight Asset Management, expressed concern about expensive valuations and the fact that a lot of good news has already been priced in, leaving the market “more vulnerable to negative surprises.”
Looking Ahead: Key Events to Watch
When markets reopen on Monday, July 7, investors will be closely monitoring developments on President Trump’s “One Big, Beautiful Bill” and any further trade agreements ahead of the July 9 tariff pause deadline.
Additionally, market participants will be watching for signals from Federal Reserve officials regarding potential rate cuts, as well as upcoming corporate earnings reports as the second-quarter earnings season approaches. IBM is scheduled to report its second-quarter earnings on July 24, which could provide further insights into the tech sector’s performance.
As today’s market open report concludes, the stock market’s strong performance heading into the Independence Day holiday reflects investor optimism about economic resilience despite ongoing policy uncertainties. When trading resumes next week, attention will likely focus on whether this momentum can be sustained in the face of evolving trade policies and monetary policy expectations.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.