[New York Stock Exchange] June Jobs Surprise Fuels Rally... S&P and Nasdaq Hit New Highs Again

U.S. Employment Surges in June, Exceeding Expectations
Unemployment Rate Drops from 4.2% to 4.1%
Odds of July Rate Cut Plummet... 95% Chance of Hold
Focus on Additional Trade Deals; Tax Cut Bill Passes Congress

All three major indexes on the New York Stock Exchange closed higher on July 3 (local time). Optimism spread as June employment figures unexpectedly surged, signaling that the U.S. economy remains robust. As a result, both the S&P 500 and Nasdaq indexes hit new all-time highs. However, the strong employment data diminished the likelihood of an early rate cut in July, causing U.S. Treasury yields to spike.

Reuters Yonhap News

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 44,828.53, up 344.11 points (0.77%) from the previous session. The large-cap S&P 500 rose 51.93 points (0.83%) to 6,279.35, while the tech-heavy Nasdaq gained 207.97 points (1.02%) to finish at 20,601.1. Both indexes set new record highs for the second consecutive day.

With Independence Day approaching on July 4, the market closed early at 1 p.m.

U.S. employment in June saw a significant and unexpected increase. The Department of Labor announced that nonfarm payrolls grew by 147,000 in June 2025. This figure far exceeded Bloomberg’s forecast of 106,000 and was also higher than the May figure of 144,000. The May nonfarm payroll increase was also revised upward from the previously reported 139,000 to 144,000. The unemployment rate fell from 4.2% in May to 4.1% in June. The market had expected the unemployment rate to rise slightly to 4.3% in June, which would have marked the highest level since 2021, but it unexpectedly decreased by 0.1 percentage point. This indicates that the labor market remains resilient despite President Donald Trump’s aggressive tariff policies.

This was particularly notable as it came just one day after disappointing employment data was released. According to private labor market research firm ADP, private sector job creation in June decreased by 33,000, raising concerns about a slowdown in hiring. However, the Department of Labor’s nonfarm payrolls?which include both private and public sector jobs?showed strong growth, easing concerns about a weakening labor market.

The Department of Labor also reported that initial jobless claims for the week of June 22?28 totaled 233,000, slightly below the market forecast of 240,000. This is the lowest level in six weeks since mid-May. However, continuing jobless claims, representing those receiving unemployment benefits for more than two weeks, reached 1,964,000?the highest in about four years and above the expert forecast of 1,960,000.

With strong employment data reducing expectations for a rate cut, U.S. Treasury yields surged. The 10-year Treasury yield, the global benchmark for bond rates, rose 5 basis points (1bp=0.01 percentage point) from the previous day to 4.34%. The 2-year Treasury yield, which is sensitive to monetary policy, jumped 9 basis points to 3.88%.

Expectations that the Federal Reserve (Fed) would cut rates in July also dropped sharply. According to CME FedWatch, the probability of a rate cut in July stood at 4.7% as of this day, down sharply from 23.8% the previous day. The likelihood of rates being held steady reached 95.3%. The probability that the Fed will keep rates unchanged in September also jumped from 6.3% the previous day to 32.4%.

Jed Ellerbrock, portfolio manager at Argent Capital Management, commented, "The biggest takeaway from the employment report is that the Fed is unlikely to cut rates in July," adding, "Even a rate cut this year is uncertain."

Investors also focused on whether the Trump administration would reach additional trade agreements. After the U.S. signed a second trade agreement with Vietnam the previous day, there was anticipation for another agreement before the mutual tariff suspension expires on July 8.

Another key point of interest was whether the House would pass President Trump’s signature tax cut bill, known as the "One Big Beautiful Bill." The bill was passed in the House after the market closed, clearing the final hurdle in the U.S. Congress. As a result, the bill will become law once President Trump signs it as scheduled on July 4, Independence Day. However, with the passage of the tax cut bill expected to widen the fiscal deficit, how the Treasury market will respond remains a key concern.

By sector, Cadence Design Systems, a supplier of semiconductor design software, jumped 5.1%. Synopsys rose 4.9%. Their share prices climbed after the U.S. government lifted restrictions on semiconductor design software exports to China. Nvidia gained 1.33%. Microsoft and Apple rose 1.58% and 0.52%, respectively.

The New York Stock Exchange will be closed the following day in observance of Independence Day.