1:13pm: Happy Fourth!
US stock markets closed at record highs on Thursday, buoyed by a stronger-than-expected June jobs report that lifted confidence in the economy heading into the Independence Day holiday.
The S&P 500 advanced 0.8% to end at 6,297, setting a new all-time high. The Nasdaq also notched a record, rising over 1% to 20,601. The Dow Jones joined the party with a 0.8% gain to finish at 44,829.
The June nonfarm payrolls report showed 147,000 jobs added, exceeding consensus forecasts, while the unemployment rate fell to 4.1%. The data eased investor concerns about a slowing labor market and tempered expectations of an imminent interest rate cut by the Federal Reserve.
Markets will remain shut on Friday for the July 4th holiday. Investors will now look to next week’s economic releases and fresh commentary from Fed officials for clues on the policy outlook in the second half of the year.
12:45pm: Short-term stimulus, long uncertainty
Republicans in Congress are poised to send their Senate-version reconciliation bill, dubbed "One Big Beautiful," to the president ahead of their self-imposed July 4 deadline. While the Senate made several adjustments to the version passed by the House in May, Wells Fargo analysts say the overall economic implications remain largely unchanged: “bigger budget deficits and faster economic growth over the next couple of years partially offset by higher tariffs, and a somewhat more ambiguous longer-term impact.”
The Congressional Budget Office estimates the Senate bill will increase the federal deficit by $3.4 trillion over the next decade, largely due to the extension of expiring provisions from the 2017 Tax Cuts and Jobs Act (TCJA). Wells Fargo notes that this extension primarily avoids fiscal tightening rather than creating new stimulus. Stripping out the TCJA extension, the analysts estimate the bill will boost the deficit by 0.8% in fiscal year 2026 and 0.4% in 2027, adding 30 to 50 basis points to real GDP growth in 2026 and slightly less in 2027.
Over the longer term, the bill becomes fiscally contractionary as temporary tax cuts expire and spending reductions—particularly on Medicaid and green energy subsidies—take effect. However, Wells Fargo cautions that “given the recent track record of extending expiring tax cuts and punting on planned spending cuts,” markets may doubt the full implementation of these future restraints, potentially pushing U.S. deficits to 8%-9% of GDP within a decade.
12:15pm: Nvidia closes in on $4T
Nvidia Corp (NASDAQ:NVDA, ETR:NVD) is nearing a $4 trillion market capitalization, driven by soaring demand for its AI chips and strong investor enthusiasm around artificial intelligence technology.
As of early July, Nvidia’s market cap stands at approximately $3.9 trillion.
Its market cap has surged from $1 trillion in June 2023 to nearly $4 trillion in just under two years.
Shares of Nvidia traded hands at about $160 on Thursday, having gained almost 25% in the last 12 months.
11:45am: Tech rally gathers steam
Technology shares are heading into the second half of the year on a bullish footing, with growing adoption of artificial intelligence expected to drive another leg higher in the sector's rally.
Wedbush predicts a further 10% gain for tech stocks by the end of 2025, with Nvidia Corp (NASDAQ:NVDA, ETR:NVD), Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB), Palantir Technologies Inc (NYSE:PLTR) and Tesla Inc (NASDAQ:TSLA) flagged as top picks.
The investment bank believes markets are still underestimating the scale of AI-driven growth, with enterprise and government spending on the technology set to exceed $2 trillion over the next three years.
"We have barely scratched the surface of this fourth industrial revolution," it said, calling Nvidia and Microsoft the poster children of the AI boom.
Wedbush expects the focus to shift increasingly toward software stocks, as more companies move from testing AI to deploying it at scale.
11:00am: 'Shocking upside surprise'
Kathleen Brooks, research director at XTB, siad the stronger-than-anticipated jobs report is “one of the most shocking upside surprises for months.”
“It turns out the US jobs market is not as soft as analysts thought,” said Brooks.
Government hiring was a key driver of the gains, particularly at the state and local level in the education sector, offsetting a decline in federal jobs. Brooks observed that government hiring had slowed earlier in the year but appears to be picking up. “Now that Doge has been scaled back with the exit of Elon Musk from the White House, this could see the US government, especially the states and local governments, ramp up hiring for the rest of the summer and into the Autumn,” she said. “This could be good news for the US labour market and future jobs growth.”
Despite weakness in the private sector, Brooks emphasized the role of public hiring in supporting employment levels. “The government is an important job creator in the US economy, and if it keeps hiring then it could keep the labour market buoyant for some time,” she said.
On the policy front, the data is leading markets to pull back expectations for aggressive Fed easing. “Fears about a softer labour market forcing the Federal Reserve into a more aggressive rate-cutting cycle is being rapidly priced out,” Brooks said. “The prospect of a July cut has been wiped out… A September cut had been fully priced earlier this week, but that is now down to 77%.”
10:25am: Payroll suprise
The stronger-than-expected jobs report was a surprise following weak private payroll data, according to analysts.
“Given the strong jobs numbers… the Fed is much less likely to cut rates this month than many were talking about earlier this week," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
The June data showed healthcare remained a pillar of job creation, adding 39,000 positions, in line with its average monthly pace. But hiring remained tepid across most other industries, and federal government employment declined by 7,000 jobs.
“June payrolls grew by 147,000 after rising a revised 144,000 in May,” noted Jeffrey Roach, chief economist at LPL Financial. “If businesses keep expanding payrolls like they’ve done so far this year, the Fed can comfortably sit in ‘wait and see’ mode at the upcoming policy meeting.”
Roach added that trade uncertainty “has apparently not spooked businesses into shedding workers,” but warned that “the administration is still actively negotiating details with several major trading partners and the eventual business impacts are unknown.”
9.53am: Nasdaq leads opening gains, S&P hits new high
Wall Street has started Thursday in a good mood, it seems.
All three main indices have opened over 0.5% higher, topped by a 0.6% gain for the tech-powered Nasdaq.
It means another new record high for the S&P 500, now topping 6,260, with Amazon, Meta, Oracle and KKR among those driving gains.
Donald Trump just now also said he is holding a call with Russian counterpart Vladimir Putin at 10am Washington time, 3pm here, while a call with Ukraine is also expected by Friday.
9.25am: Stock futures up as NFP analysed
Stock futures are up now, with those for the Nasdaq 100 pointing to a 0.35% gain, while the S&P 500 and Dow Jones are seen heading for gains of around 0.3% and 0.2%.
Fawad Razaqzada, market analyst at City Index, said: "Despite the strong payroll print, the lower wage gains and the composition of job additions — with a heavy tilt toward government hiring — mean the report is not as inflationary as it might appear.
"This complicates the Federal Reserve’s calculus. Before the report, some investors speculated about a potential rate cut in July, but the data has now effectively ruled that out. More notably, the likelihood of a September rate cut has also diminished. As a result, markets have begun re-pricing expectations for monetary policy in the second half of the year."
Economist Nancy Vanden Houten at Oxford Economics said there "some elements of softness beneath the better-than-expected headlines," but the June employment report is "strong enough to allow the Federal Reserve to keep policy on hold as it monitors the impact of tariffs on inflation".
With payrolls rising by 147K in June, job gains were "narrowly based", she says, with a spike in state and local government employment that was likely to be driven by seasonal factors explaining more than half of the increase in payrolls.
The unemployment rate defied expectations for an increase and declined in June, but she says "the risk going forward is that slower labor force growth keeps the unemployment rate low even as the number of unemployed rises. However, while the labor force did decline in June, but the number of unemployed also fell sharply."
8.40am: Non-farm payrolls comes in hot
US stock futures spiked but quickly resumed their passive position after the nonfarm payrolls print was stronger than expected.
The official US labor market data showed 147K new hires were made last month, much higher than the expected 111K and up from May's figure, even though that was revised higher to 144K.
In the initial reaction in bond markets there was a spike in yields, with the 10yr Treasury rising from 4.27% to 4.36%.
In currency markets, the dollar 0.6% versus the euro to $1.1723, 0.3% against the pound to $1.3588 and 0.8% on the yen to ¥144.79.
8.27am: NFP consensus forecast
The Street consensus for non-farm payrolls is for 110,000 jobs to have been added in June, down from 139,000 in May.
The US unemployment rate is forecast to rise to 4.3%, from 4.2%.
Wage growth is a key focus, with a 0.3% rise in the month of June, or 3.7% compared to a year earlier.
8am: Stock futures just above flat as NFP awaited
Wall Street futures were flat on Thursday morning, having been searching high and low for direction in the past few hours, ahead of the big US jobs numbers and voting on President Trump's tax cuts bill.
Futures for the S&P 500, Dow Jones and Nasdaq Composite were all up less than 0.1%.
Today brings a rare occurrence of the US non-farm payrolls coming out on a Thursday, with markets closed tomorrow for the 4th July Independence Day holiday.
Fresh from yesterday’s disappointing ADP jobs figure, the lowest since March 2023, traders are wondering whether the official jobs number can come in higher than expected for the third month in a row.
"For markets the current lack of any notable uptick in inflation pressures does mean that they can dream of near-term rate cuts, but realistically it would require significant job market weakness in the form of an unemployment spike, or a payrolls collapse," says market analyst Joshua Mahony at Rostro.
"In reality, the ongoing tariff uncertainty will mean that market perception over where rates go in H2 will be dictated by whether Trump pushes trade taxes sharply higher for some of their key trading partners next week."
On top of the Vietnam deal announced yesterday, there are reports of another deal with Indonesia now.
Voting on Donald Trump's 'One Big Beautiful Bill' is also a key event today, with the President having wanted his tax and spending budget to be signed off before the long weekend. This morning the House voted 219-213 to move the bill forward to a final stage after some stalemate.
The bill was held up in a tense session overnight in the House of Representatives, as the President seemed to struggle to beat a rebellion of his own Republican party.
"Largest tax cuts in history and a booming economy vs biggest tax Increase in history, and a failed economy," Trump posted. "What are the Republicans waiting for?"