Market Recap – Wednesday, July 2, 2025
Markets Close Higher Amid Record-Breaking Tech, Trade Deals, and Mixed Economic Data
Stocks mostly finished higher on Wednesday, with the S&P 500 and Nasdaq hitting new record highs. The Dow rose slightly, while the Russell 2000, which tracks small-cap stocks, saw the biggest gain of 1.31%. It was a solid day for sectors like semiconductors, energy, industrial metals, and airlines. Small-cap stocks and companies exposed to Southeast Asia, like athletic apparel and home-furnishing retailers, also performed well. On the other hand, industries like healthcare, insurance, software, and telecom saw declines. Tech stocks were mixed, with Tesla showing better-than-expected deliveries, while Apple and Nvidia provided some support.
Key Market Developments:
It was a relatively quiet session with little big news, but a few key events were in play. The ADP report showed a surprising drop in private payrolls, with jobs actually decreasing by 33K in June, which was much worse than expected. This added some uncertainty ahead of the official jobs report (nonfarm payrolls) due tomorrow. There's still talk about a possible Federal Reserve interest rate cut, though the weak ADP numbers didn’t really change expectations. Also, President Trump announced a trade deal with Vietnam, while tensions remain high with Japan and the EU over tariffs. The big question now is whether Congress will be able to pass Trump’s $3.3 trillion tax and spending bill in time for the 4th of July deadline.
Commodities & Currency:
In the commodity market, oil prices jumped by 3.1%, and Bitcoin rebounded by 4%, pushing prices back above $110K. Gold edged up by 0.3%, and the US dollar stayed mostly flat, though it was stronger against the British pound amid political uncertainty in the UK.
Notable Gainers:
Greenbrier Cos. (GBX): +21.1%, after reporting strong earnings and raising its margin outlook for the year.
Rigetti Computing (RGTI): +15.5%, as analysts upgraded the stock due to optimism about the future of quantum computing.
Tesla (TSLA): +5.0%, after reporting slightly lower-than-expected deliveries but a positive performance in key markets like China.
Apple (AAPL): +2.2%, upgraded by analysts who expect strong sales in China, despite concerns about iPhone growth in the second half of the year.
Notable Decliners:
Centene (CNC): -40.4%, after the company withdrew its financial guidance for 2025 due to unexpected data issues.
UniFirst (UNF): -10.2%, after earnings came in better than expected, but revenue fell short and guidance was mixed.
Rivian (RIVN): -4.5%, after production numbers for Q2 missed expectations.
Intel (INTC): -4.3%, following reports that the company is considering a costly shift in its business strategy.
Key Economic Updates:
ADP Private Payrolls: The June ADP report showed a surprising contraction in jobs, with a loss of 33K positions. This was the first negative reading since March 2023. The biggest job losses were in services, particularly in professional services, education, and healthcare. On the flip side, sectors like leisure, hospitality, and manufacturing added jobs.
Trade Developments: President Trump announced a new trade deal with Vietnam, which includes a 20% tariff on exports to the US. However, challenges remain with Japan, where Trump criticized trade imbalances, especially on rice and autos. The US is also negotiating with the EU and India, but it’s uncertain whether agreements will be reached by the July 9th deadline.
What's Next:
All eyes are on tomorrow’s June jobs report, where expectations are for a slowdown in job growth to around 115K, down from 137K in May. The unemployment rate is expected to tick up slightly to 4.3%. Analysts are closely watching the data for any signs of weakness in the labor market, which could influence the Fed’s decision on interest rates.
Here's Our Take:
The market showed strong performance today, with the S&P 500 and Nasdaq reaching new record highs, fueled by a broad rally across various sectors like semiconductors, energy, and industrial metals. Small-cap stocks and companies exposed to Southeast Asia also performed well. However, some sectors like healthcare, telecom, and software lagged behind. While the ADP private payrolls report showed a surprising contraction, the market didn’t react strongly, as attention shifts to tomorrow’s official jobs report. Trade developments, including a new deal with Vietnam, also kept investors on edge, while challenges remain with Japan and the EU. With the Federal Reserve's rate decision still in play, tomorrow’s jobs report will be crucial in shaping expectations for future monetary policy. Overall, it’s a mixed picture, with some sectors showing resilience while others are weighed down by economic uncertainty.
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