U.S. Stocks Surge 0.5% as Jobs Data Drives Record Highs

The U.S. stock market experienced a significant boost on Thursday, July 3, as the S&P 500 reached a new record high and the Dow Jones Industrial Average opened higher. This surge was driven by a positive market reaction to the latest jobs data, which showed stronger-than-expected employment growth.

The non-farm payrolls report revealed that the U.S. economy added 147,000 jobs in June, surpassing economists’ expectations of 106,000. The strongest job gains were observed in state government and healthcare sectors, while the federal government continued to reduce its workforce. Additionally, the unemployment rate fell to 4.1%, defying forecasts of a rise to 4.3%.

In response to the robust jobs report, the Dow Jones Industrial Average opened more than 100 points higher, with the S&P 500 and Nasdaq Composite both reaching fresh all-time highs. The S&P 500 was up nearly 0.5% in early trading, while the Nasdaq Composite added 0.6%. The Dow, currently trading at 44,782, is now within striking distance of the 45,000 level, marking a strong run from the 38,000 level it traded at just in April.

The positive jobs data also led to a decrease in bullish bets on a Federal Reserve rate cut in July. The CME FedWatch Tool now shows that markets are pricing in only a 5% chance of a rate cut, down from 24% the previous day. This shift in sentiment reflects the market's confidence in the economic recovery, as indicated by the strong employment figures.

Investors remain cautious, however, as they focus on President Donald Trump’s tax bill, which was passed by the U.S. Senate on July 1 and is now facing a final vote following its earlier adoption by the Republican-controlled House. The first week of July will be a shortened one for U.S. markets, with July 4 marking Independence Day. Ahead of the full stock market closure on Friday, the New York Stock Exchange and the Nasdaq will close early – at 1 p.m. ET. on Thursday.