Market Overview: A Bullish Close
On July 4, 2025, the US stock market ended the holiday-shortened week with impressive gains. Strong economic indicators, particularly the June jobs report, fueled investor confidence. Consequently, major indices like the Dow Jones, S&P 500, Nasdaq, and Russell 2000 hit record or near-record highs. However, concerns about overvaluation and upcoming tariffs linger.
Closing Prices and Performance
- Dow Jones Industrial Average: Closed at 44,828.53, up 344.11 points (+0.77%). Weekly gain: 2.3%.
- S&P 500: Reached 6,279.36, up 51.94 points (+0.83%). Weekly gain: 1.72%. Seventh record close.
- Nasdaq Composite: Ended at 20,601.10, up 207.97 points (+1.02%). Weekly gain: 1.62%.
- Russell 2000: Climbed to 2,249.04, up 1.02%. Weekly gain: 3.41%.
Trading volume was light at 10.85 billion shares due to the early 1 p.m. ET close for Independence Day.
Economic Drivers: Jobs Report Shines
The June non-farm payrolls report exceeded expectations, adding 147,000 jobs against a forecast of 110,000. Additionally, the unemployment rate dropped to 4.1%, beating the 4.3% estimate. State government hiring surged by 73,000, offsetting private-sector losses. Meanwhile, wage growth slowed to 3.7% annually (vs. 3.9% expected), easing inflation fears.
- Jobless Claims: Fell to 233,000, down 4,000 from last week. Continuing claims steady at 1.964 million.
- Impact: These figures dispelled recession concerns, boosting market sentiment.
Interest Rates and Bond Yields
The strong jobs data reduced expectations for a July rate cut to 4.7% (from 20%). September’s 0.25% cut probability is 68%. Meanwhile, bond yields rose:
- 10-Year Treasury: 4.33%, up 1.10%.
- 2-Year Treasury: 3.88%, up 2.56%.
The US dollar index climbed 0.40% to 96.81, while gold and oil prices dipped. Rising yields reflect growth optimism but may pressure valuations.
Policy Spotlight: Tax Bill Passes
The House passed a $3.4–4 trillion tax and spending bill (218–214), reducing renewable energy subsidies and healthcare benefits. This boosts short-term liquidity but raises long-term inflation concerns. Investors are watching tariff developments, with a July 9 deadline looming.
Sector and Stock Highlights
Broad Market Trends
Of 6,164 stocks, 4,174 rose, and 1,990 fell. The Fear & Greed Index hit 78, indicating extreme greed. Tech, consumer discretionary, and biotech led gains.
Key Stocks
- Nvidia: Rose 1.3% to $160+, market cap at $3.89 trillion, nearing Apple’s record.
- Apple: Up 1.3% on China sales growth (+8%).
- Tesla: Dipped to $313–319, hurt by Cybertruck sales (10,394 units) and subsidy cuts.
- CoreWeave: Surged 8.85% on Nvidia system adoption.
- Salesforce: Gained after price hikes and Morgan Stanley’s buy rating.
- Datadog: Jumped 14.9% on S&P 500 inclusion.
- Tripadvisor: Climbed 16.7% on activist investor stake.
Sector Performance
- Electric Vehicles: Lucid (+37%), Rivian (+1.5%) outperformed; Tesla lagged.
- Semiconductors: Broadcom (+1.96%) and Nvidia rose; China export rules eased.
- Consumer: Ralph Lauren, Crocs, and Chipotle gained on economic strength.
- Fintech: Bitcoin hit $109,862; Coinbase and Circle rebounded.
- Airlines: Boeing and Joby Aviation rose on travel demand.
Market Outlook: Opportunities and Risks
Valuation Concerns
The S&P 500’s forward P/E ratio is 22, signaling potential overvaluation. The Fear & Greed Index at 78 suggests caution. Negative surprises, like tariff hikes, could trigger pullbacks.
Key Risks
- Tariffs: July 9 deadline may raise inflation.
- Yields: Rising bond yields could cap equity gains.
- Geopolitics: Trade and policy uncertainties persist.
Opportunities
- Tech/AI: Nvidia, CoreWeave, and semiconductors remain strong.
- Consumer: Retail and travel benefit from economic resilience.
- Biotech: Outpacing defensive healthcare stocks.
Conclusion: A Strong Finish, But Caution Ahead
The US stock market closed July 4, 2025, with record highs, driven by robust jobs data and policy developments. However, high valuations and tariff uncertainties warrant vigilance. Investors should monitor inflation, rates, and trade talks next week. Tech, consumer, and biotech sectors offer opportunities, but risks remain. Markets are closed tomorrow for Independence Day.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions.