Market Rally: New Highs and Hot Jobs

Fresh news and strategies for traders. SPY Trader episode #1283. Welcome back to Spy Trader, your goto podcast for navigating the markets! I'm your host, Cash Flow Charlie, and it's 12 pm on Thursday, July 3rd, 2025, Pacific time. We've got a lot to unpack from the market action today, so let's dive right in. The U.S. stock market is showing broadly positive trends, with major indices pushing higher, and some even hitting new alltime highs, though we've got some mixed economic signals under the hood. As of today, the S&P 500 and Nasdaq Composite have been on a tear, closing at record highs for the fourth time in the last five days. The S&P 500 gained roughly 0.8% today, and the Nasdaq Composite surged about 1%. Not to be outdone, the Dow Jones Industrial Average also climbed around 0.8%, nearly touching a new high not seen since December. Over the past month, the US500 index, a key benchmark, has jumped over 5%, and it's up nearly 13% compared to this time last year, reaching an alltime high of 6285.30 in July. Breaking it down by sectors, Technology is leading the charge today, with gains between 0.98% and 1.30%. Financials and Industrials are also showing strong performance, up roughly 0.83% to 1.10% and 0.50% to 0.84% respectively. On the yeartodate front, Industrials are up over 13%, Communication Services over 11%, and Technology nearly 11%. Technology, in particular, is expected to continue its market dominance, fueled by advancements in ecommerce, automation, blockchain, 5G, and of course, AI. Unfortunately, Healthcare has been the weakest performer yeartodate, down 1.53%. Now, for the news driving all this action: A big cheer for the strong June jobs report! U.S. employers added 147,000 jobs, beating expectations, and the unemployment rate fell to 4.1%. This really highlights the resilience of the U.S. economy and is definitely contributing to the market rally. However, this good news has also tempered expectations for immediate interest rate cuts from the Federal Reserve. The market is currently pricing in two or three rate cuts for 2025, while the Fed's own projections lean towards just two. There's also a buzz of optimism around potential trade deals, adding fuel to the market's ascent. And we're keeping an eye on a significant U.S. tax bill making its way through the House of Representatives. Plus, great news for homebuyers: mortgage rates have fallen for the fifth consecutive week, hitting their lowest point since midApril. Looking at the bigger picture, the U.S. economy is presenting a bit of a mixed bag. Real Gross Domestic Product, or GDP, actually decreased at an annual rate of 0.5% in the first quarter of 2025, a reversal from the prior quarter's increase. This was mainly due to increased imports and decreased government spending, although gains in investment and consumer spending did partially offset it. The U.S. goods and services trade deficit also widened in May to 71.5 billion dollars. But on the brighter side, the Manufacturing PMI rose in June, and job openings increased to 7.8 million in May, pointing to underlying strength in certain areas. While there weren't major, broad company events today, largecap tech giants like Nvidia, Microsoft, Amazon, and Broadcom continue their strong performance, significantly contributing to the Nasdaq and S&P 500's gains. First Solar Inc. was up over 8.5%, and Cadence Design Systems Inc. gained over 5%. So, what's behind all this? The current bullish sentiment is largely driven by that robust labor market and ongoing optimism about corporate earnings and potential trade resolutions. The strong jobs report provides a solid foundation of economic stability, which is generally good for stocks. But as we discussed, this very strength creates a tricky balancing act for the Federal Reserve's monetary policy. A healthy economy is fantastic, but it reduces the immediate need for those aggressive interest rate cuts that some investors were hoping for. This dynamic

Episode Transcript

(00:00):
Welcome back to Spy Trader , your goto podcast for navigating the markets !
I'm your host , Cash Flow Charlie , and it's 12 pm on Thursday , July 3rd , 2025 , Pacific time .
We've got a lot to unpack from the market action today , so let's dive right in .
The U.S.
stock market is showing broadly positive trends , with major indices pushing higher , and some even hitting new alltime highs , though we've got some mixed economic signals under the hood .

(00:30):
As of today , the S&P 500 and Nasdaq Composite have been on a tear , closing at record highs for the fourth time in the last five days .
The S&P 500 gained roughly 0.8% today , and the Nasdaq Composite surged about 1% .
Not to be outdone , the Dow Jones Industrial Average also climbed around 0.8% , nearly touching a new high not seen since December .

(00:58):
Over the past month , the US500 index , a key benchmark , has jumped over 5% , and it's up nearly 13% compared to this time last year , reaching an alltime high of 6285.30 in July .
Breaking it down by sectors , Technology is leading the charge today , with gains between 0.98% and 1.30% .

(01:24):
Financials and Industrials are also showing strong performance , up roughly 0.83% to 1.10% and 0.50% to 0.84% respectively .
On the yeartodate front , Industrials are up over 13% , Communication Services over 11% , and Technology nearly 11% .

(01:49):
Technology , in particular , is expected to continue its market dominance , fueled by advancements in ecommerce , automation , blockchain , 5G , and of course , AI .
Unfortunately , Healthcare has been the weakest performer yeartodate , down 1.53% .

Now , for the news driving all this action (02:06):
A big cheer for the strong June jobs report !
U.S.
employers added 147,000 jobs , beating expectations , and the unemployment rate fell to 4.1% .
This really highlights the resilience of the U.S.
economy and is definitely contributing to the market rally .

(02:27):
However , this good news has also tempered expectations for immediate interest rate cuts from the Federal Reserve .
The market is currently pricing in two or three rate cuts for 2025 , while the Fed's own projections lean towards just two .
There's also a buzz of optimism around potential trade deals , adding fuel to the market's ascent .

(02:50):
And we're keeping an eye on a significant U.S.
tax bill making its way through the House of Representatives .

Plus , great news for homebuyers (02:56):
mortgage rates have fallen for the fifth consecutive week , hitting their lowest point since midApril .
Looking at the bigger picture , the U.S.
economy is presenting a bit of a mixed bag .
Real Gross Domestic Product , or GDP , actually decreased at an annual rate of 0.5% in the first quarter of 2025 , a reversal from the prior quarter's increase .

(03:24):
This was mainly due to increased imports and decreased government spending , although gains in investment and consumer spending did partially offset it .
The U.S.
goods and services trade deficit also widened in May to 71.5 billion dollars .
But on the brighter side , the Manufacturing PMI rose in June , and job openings increased to 7.8 million in May , pointing to underlying strength in certain areas .

(03:53):
While there weren't major , broad company events today , largecap tech giants like Nvidia , Microsoft , Amazon , and Broadcom continue their strong performance , significantly contributing to the Nasdaq and S&P 500's gains .
First Solar Inc.
was up over 8.5% , and Cadence Design Systems Inc.

(04:15):
gained over 5% .
So , what's behind all this ?
The current bullish sentiment is largely driven by that robust labor market and ongoing optimism about corporate earnings and potential trade resolutions .
The strong jobs report provides a solid foundation of economic stability , which is generally good for stocks .

(04:37):
But as we discussed , this very strength creates a tricky balancing act for the Federal Reserve's monetary policy .
A healthy economy is fantastic , but it reduces the immediate need for those aggressive interest rate cuts that some investors were hoping for .
This dynamic could lead to some adjustments in market expectations .

(04:59):
The continued outperformance of the Technology sector really reflects the ongoing innovation and growth in areas like AI and digital transformation , making it a key engine for the overall market's ascent .
The strength in Financials and Industrials suggests confidence in broader economic activity and a potentially favorable environment for cyclical stocks .

(05:23):
We'll definitely be watching that latest GDP and personal spending data closely to make sure the broader economic narrative remains consistent with a