July 2nd, 2025
U.S. stocks edged higher Wednesday as growing optimism over trade deals and fresh signs of a cooling labor market strengthened expectations for Federal Reserve rate cuts.
The Dow Jones Industrial Average (^DJI) added about 0.1%, while the S&P 500 (^GSPC) climbed roughly 0.3%, staying within reach of a new record high.
The Nasdaq Composite (^IXIC) led the gains, rising around 0.7%, boosted by Apple (AAPL) shares after a Jefferies (JEF) upgrade and Tesla (TSLA), which rallied after the company exceeded vehicle production forecasts in Q2 despite a sharp drop in sales.
Overseas, European markets are mostly trading higher, while Asian markets closed mixed after reports indicated slower-than-expected progress in U.S.-Japan trade talks.
Economic Takeaways:
- In the U.S., the June ADP employment report showed weaker-than-forecast job growth, with private payrolls shrinking by 33,000—pointing to further softening in the labor market.
- The reconciliation bill returns to the House of Representatives after Senate amendments, where it may face renewed debate.
- Bond yields are moving up, with the 10-year Treasury yield opening near 4.3%.
- Reports indicate that U.S.-EU trade talks are making progress, alongside improving negotiations with Canada after it decided to drop its proposed digital services tax.
- The U.S. Dollar Index ($DXY) hovered near a three-year low. “Expectations for slower growth, lower inflation, lower forward rates, and shifting preferences for non-U.S. investment are driving the dollar lower,” said Schwab’s Jones. “A weaker dollar adds to inflation pressure.”
- As of early Wednesday, the CME FedWatch Tool showed a 25% chance of a July rate cut—up from 20% yesterday after softer ADP jobs data. Markets are pricing in a 98% likelihood of at least one cut by September.
- On the technical front, the S&P 500 saw a bullish signal Tuesday as its 50-day moving average crossed above the 200-day for the first time since early April.
- Bitcoin (/BTC) climbed 2.1%, with crypto stocks Coinbase (COIN) and MicroStrategy (MSTR) rebounding after sharp losses Tuesday. Circle Internet Group (CRCL), which rose over 6% on Tuesday in a rebound move, dipped slightly early today.
Trump Announces Trade Deal with Vietnam
President Trump announced a trade agreement with Vietnam on Wednesday, boosting investor hopes that more deals could follow ahead of the July 9 tariff-pause deadline.
“The Terms are that Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping,” Trump wrote on social media.
“In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade,” he added.
Trump also noted, “It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam.”
The announcement comes as investors closely monitor trade developments leading up to the July 9 deadline, which marks the end of a 90-day pause on reciprocal tariffs announced in April. The U.S. recently also reached a framework agreement with China, signaling potential momentum on the global trade front.
On the Move
- Nvidia (NVDA) and other Magnificent Seven stocks continued to slide early Wednesday, weighed down by ongoing rotation out of big tech and communication services following yesterday’s declines.
- Apple (AAPL) bucked the trend, rising 1% in premarket trading after Jefferies upgraded the stock to Hold from Underperform, citing strong iPhone sales and expectations for solid earnings.
- Footwear stocks climbed Wednesday morning after President Trump announced on Truth Social that he had “made a Trade Deal with Vietnam.” Nike (NKE), On Holding (ONON), Deckers (DECK), and Lululemon (LULU) all jumped sharply following the news.
- Intel (INTC) shares dropped 3.7% after a Reuters report revealed the company’s new CEO is weighing the possibility of abandoning its highly anticipated 18A chip technology for external customers.
- Tesla (TSLA) stock rose nearly 3% early Wednesday after the EV maker reported global electric vehicle deliveries that, while falling short of Wall Street’s low projections, still exceeded internal expectations for production.
- Netflix (NFLX) gained 0.65% premarket after The Wall Street Journal reported the company is exploring a potential partnership with Spotify (SPOT) on music award shows or live concert events.
- Retail names like Nike (NKE), Best Buy (BBY), and Macy’s (M)—which all surged more than 5% yesterday as investors rotated into underperforming Q2 stocks—saw modest gains early this morning.
- Insurance stocks fell sharply Wednesday after the previous session’s passage of President Trump’s “big, beautiful” tax and spending bill, which includes major cuts to federal healthcare spending over the next decade.
- UnitedHealth (UNH) slid nearly 3%, CVS Health (CVS), the parent of Aetna, dropped more than 2%, Cigna (CI) declined 3%, and Elevance Health (ELV) tumbled nearly 9%.
- Verint Systems (VRNT) jumped 7.4% following a Bloomberg report that a private equity firm is in talks to acquire the company.
- General Motors (GM) and Ford (F), both of which rallied Tuesday, edged higher in premarket trading ahead of U.S. vehicle sales data. Sales fell to a 15.65 million seasonally adjusted annual rate in May, missing expectations.
- Large U.S. banks traded higher early Wednesday after several announced dividend hikes and buybacks following their success in the Fed’s annual stress tests. Bank of America (BAC) and JPMorgan Chase (JPM) each rose 0.5%.
- Adobe (ADBE) slid 1.4% after Rothschild & Co. Redburn downgraded the stock to Sell from Neutral.
- Centene (CNC) plunged more than 30% premarket after the company pulled its 2025 guidance.Bottom of Form
- Robinhood (HOOD) shares touched a record high of $100 for the first time ever on Wednesday.
- Microsoft (MSFT) is cutting its workforce by up to 4%, the company confirmed Wednesday.
What’s Ahead
Nonfarm payrolls are on deck Thursday, with a House vote approaching and a key tariff deadline drawing near.
Tomorrow’s June nonfarm payrolls report, due at 8:30 a.m. ET, comes as analysts point out that fewer new jobs are needed to match population growth, especially with immigration sharply lower this year. While Wall Street might view monthly job growth below 100,000 as weak, some analysts say it would need to fall well below that to actually push up unemployment.
The market will be closed on Friday and will close early on Thursday at 1 p.m. ET.
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