In the US stock market, S&P 500 and Nasdaq closed at record highs on Wednesday (July 3). Reuters
The S&P 500 and Nasdaq closed at fresh records on Wednesday (July 3), continuing their positive streak despite mixed economic signals. Trading volumes were notably thin ahead of the July 4th holiday.
The broad-based S&P 500 rose 0.5 per cent to close at 5,537.02, while the tech-heavy Nasdaq Composite Index surged 0.9 per cent to 18,188.30. In contrast, the Dow Jones Industrial Average edged down 0.1 per cent to 39,308.00.
Economic indicators give markets a boost
US private-sector hiring for June fell slightly short of expectations. Meanwhile, a report from the Institute for Supply Management revealed an unexpected contraction in the services sector.
Investors are now turning their attention to Friday’s jobs report. Art Hogan of B. Riley Wealth Management told AFP that the labour market appears to be “normalising but not collapsing.” Wall Street hopes for an economic softening that tempers inflation without leading to job losses or a recession. The upcoming report from the US government on June payroll additions is highly anticipated.
According to CME Group data, traders are now placing nearly a three-in-four chance that the Federal Reserve will cut its main interest rate by September.
Market movers
Tesla was a significant market driver, gaining 6.5 per cent after reporting a smaller-than-expected drop in spring sales. Nvidia, a key player in the artificial intelligence sector, climbed 4.6%, bringing its year-to-date gain to 159 per cent.
Southwest Airlines advanced 1.6 per cent after announcing a shareholder rights plan to prevent Elliott Investment Management from gaining a controlling stake.
Paramount Global surged 6.9 per cent following reports of a deal with movie studio Skydance, reviving earlier talks that had stalled.
Conversely, Constellation Brands fell 3.8 per cent despite a 22 per cent jump in quarterly profits to $877 million, driven by strong beer sales. The decline was attributed to falling net sales in wine and spirits.
Bond market dynamics
Ahead of the holiday, trading volumes were extremely low. The yield on the 10-year Treasury dropped to 4.35 per cent from 4.44 per cent on Tuesday, while the two-year Treasury yield, which closely reflects expectations for Fed actions, fell to 4.70 per cent from 4.75 per cent.
The markets are closely watching the upcoming jobs report; investors are cautiously optimistic, hoping for a soft landing that steers clear of recessionary risks.
With inputs from agencies
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