Wall Street soared to record highs as investors looked past looming inflationary pressures, rallying instead on optimism following a strong jobs report and lower-than-expected unemployment. The region notched its third consecutive week of gains, recovering losses from previous months. European markets, including London, also posted strong performances, while Australia ended the week flat.
The DOW climbed +0.8%, the S&P 500 increased +0.8%, and the NASDAQ rose +1.0% in a shortened trading session on Thursday ahead of Friday's Independence Day holiday. The latter two hit record highs as they notched a third consecutive week of gains. Nonfarm payrolls exceeded expectations, while unemployment came in lower than forecast—both indicating that the US economy remains in strong health. Yields spiked in response, as the slim prospect of a Federal Reserve rate cut diminished further, with investors now pricing in a 68% chance of a rate cut in July. However, President Trump’s tax-cut and spending bill was advanced by the House of Representatives. The bill is expected to drive demand, but it is also projected to add inflationary pressure to an already strong economy. The US two-year yield rose +10bp to 3.99%, while the US 10-year yield added +6bp to 4.35%. Nvidia gained +1.3% as it inched closer to the US$4 trillion market capitalisation mark and nearer to overtaking Apple’s current valuation as the world's most valuable company. Tripadvisor surged +16.7% after the Wall Street Journal reported investor Starboard Value had built a 9% stake in the company.
The Stoxx 600 added +0.5%, while the FTSE 100 increased +0.6%. Investors across the region digested economic data, trade negotiations, and political developments. In the UK, market sentiment improved following public support from the Prime Minister for the current Chancellor, Rachel Reeves.
Australia’s ASX 200 tracked sideways on Thursday as the resources sector kept the benchmark afloat. Rises in the price of crude oil, iron ore, and other metals supported strength in the energy and materials sectors. BHP rallied +5.7%, while Rio Tinto and Fortescue increased +1.8% each. Pro Medicus jumped +7.8% after the medical imaging firm secured two new contracts worth A$190 million with two US healthcare operators. Gemlife, a retirement housing provider, added +4.1% above its IPO price of A$4.16 per share in its debut on the ASX. Across the ditch, the NZX 50 fell -0.6%. All but Hong Kong’s Hang Seng (-0.6%) rose in Asia. Japan’s Nikkei 225 gained +0.1%, China’s Shanghai Composite and CSI 300 increased +0.6%, and Korea’s Kospi jumped +1.3%.
WTI crude fell -0.4% to US$67.20/bbl, gold lost -0.9% to US$3,328.31/oz, iron ore added +1.8% to US$95.13/MT.