S&P 500, Nasdaq hit records as stock market closes up on strong jobs data, tax bill vote
U.S. stocks closed a shortened holiday session higher, with the broad S&P 500 and tech-heavy Nasdaq scoring fresh record highs, after surprisingly strong hiring in June and prior months fueled optimism for the economy.
The stock market's closed on July 4 for Independence Day.
Employers added 147,000 new jobs, better than economists' mean forecast for 110,000 jobs, last month. The unemployment rate fell to 4.1%, instead of inching up to 4.3% as predicted by economists, from 4.2% in May. Prior month revisions further painted a rosier picture. The number of jobs added in April and May was a combined 16,000 higher than prior estimates.
"These numbers demonstrate economic resilience despite expectations for slowdowns on the backs of tariff and fiscal uncertainty," said Lara Castleton, U.S. Head of Portfolio Construction and Strategy at Janus Henderson Investors.
The blue-chip Dow closed up 0.77%, or 344.11 points, to 44,828.53; the S&P 500 gained 0.83%, or 51.93 points, to 6,279.35; and the tech-laden Nasdaq rose 1.02%, or 207.97 points, to 20,601.10. The benchmark 10-year yield edged up to 4.348% as investors dialed back bets for a Federal Reserve interest rate cut any time soon.
The strong report comes on the heels of a negative private payrolls report. The private sector unexpectedly lost 30,000 jobs in June, badly missing expectations for a 100,000 increase, according to payrolls processing firm ADP.
But the government's solid June report "confirms that the labor market remains resolute and slams the door shut on a July rate cut," said Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments. The CME FedWatch tool that tracks probabilities for rate cuts at each Fed meeting shows less than a 5% chance rates will drop at the Fed's July meeting.
Trade hopes and tax bill
Investors also will keep an eye on trade negotiations and progress of the mega tax bill backed by President Donald Trump in the House of Representatives.
Stocks rose after Trump said in a social media post that the U.S. had struck a trade deal with Vietnam. The deal includes a 20% tariff on imports from the country. Goods that originated in another country but were transferred to Vietnam for final shipment to the U.S. will be levied 40%.
Chip software maker Synopsys and Cadence said the U.S. government has rescinded its export restrictions on chip-design software to China. Shares of each rose around 5%.
Both these moves eased fears over prolonged trade tensions and tamed inflation fears. Economists had predicted inflation could spike higher if Trump enacted his highest tariffs.
Meanwhile, the House moved closer to passing the mega tax bill. The House is slated to vote on the bill July 3 to get it to the president's desk by a self-imposed July 4 deadline.
“We have the votes,” House Speaker Mike Johnson, R-Louisiana, told reporters on July 3 in a signal of the GOP leader's high confidence there won't be enough internal defections or embarrassments when the final roll call gets going in a chamber where his party has the slimmest of margins for error.
Corporate news
- Datadog will replace Juniper Networks in the S&P 500 on July 9. Shares closed up 15%.
- Electric vehicle maker Lucid Group said it delivered more vehicles in the second quarter. Lucid stock rose 5.37%.
- Online travel company Tripadvisor shares surged after The Wall Street Journal reported, citing people familiar with the matter, that activist investor Starboard Value has taken a stake of more than 9%. Shares of TripAdvisor gained 16.74%.
- Nvidia reached an all-time high, edging the company's valuation closer to $4 trillion. Shares closed up 1.33%.
Cryptocurrency
Bitcoin has mostly been stuck in a range below its all-time high because of a quiet changing of hands of the digital asset to institutional investors from large individual holders, according to Bloomberg.
Over the past year, large individual holders, or so-called whales, have dumped more than 500,000 Bitcoin, worth more than $50 billion, which is roughly equal to the net inflows into U.S. exchange-traded funds, it said. Institutions now control about a quarter of all Bitcoin in circulation, Bloomberg reports.
Bitcoin was last up 0.58% at $109,461.80.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.