New York CNN —
Stocks, bond yields and the dollar gained on Thursday after a strong jobs report soothed nerves about how the economy is faring during the early stages of President Donald Trump’s tariff campaign.
After a shortened trading day in advance of Friday’s July Fourth holiday, the Dow closed higher by 344 points, or 0.77%. The broader S&P 500 rose 0.83% and the tech-heavy Nasdaq Composite gained 1.02%.
The S&P 500 and Nasdaq closed at fresh record highs. The Dow closed just 186 points away from hitting an all-time high.
Stocks had jumped higher in the morning after new data showed the economy added 147,000 jobs in June, exceeding expectations. The unemployment rate ticked lower to 4.1% from 4.2%.
The strong headline numbers provided relief for investors who were nervous about a potential slowdown in the economy as the president’s tariffs portend to impact business activity.
Related article The hidden bad news in the June jobs report
“The June jobs report is like a summer blockbuster — plenty of action and a surprise twist. Despite tariffs, DC drama and global headwinds, the US labor market just pulled off a better-than-expected performance,” Gina Bolvin, president of Bolvin Wealth Management Group, said in an email.
While markets jumped higher, investors also noted caution. The breakdown of job growth showed a less rosy picture, with the private sector showing signs of weakness, according to Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“There was one cautionary note,” Baird said. “Private sector hiring was fairly weak. So, that’s the asterisk that I would put on the report, and something to watch.”
Job growth in June was not widespread across sectors. Meanwhile, the average duration of unemployment rose and the share of unemployed workers who have been out of a job for 27 weeks or longer edged closer to a three-year high.
“Businesses are a little bit more hesitant to hire,” Baird said. “Lots of questions still related to the impact of trade, tariffs and the tax code making its way through Congress. I think there has been a cautious tone on the hiring front that we’ve been seeing and hearing about for some period of time. And I think that did show up in the numbers this month.”
Treasury yields jumped higher as investors dialed back expectations for future rate cuts from the Federal Reserve. The 10-year yield rose to 4.34% and the 30-year yield rose to 4.86%.
The US dollar index, which measures the dollar’s strength against six major foreign currencies, gained 0.45%. The dollar index was set for its biggest daily gain in nearly two weeks.
David Russell, global head of market strategy at TradeStation, said in an email that the June jobs report was “good news for the economy and corporate earnings because there’s no sign of a recession.”
“Uncertainty around tariffs and trade have apparently not spooked businesses into shedding workers,” Jeffrey Roach, chief economist at LPL Financial, said in an email. “One note of caution: the administration is still actively negotiating details with several major trading partners and the eventual business impacts are unknown.”
The Dow, S&P 500 and Nasdaq all closed the week in the green.
The labor market continues to prove resilient, which gives the Fed more time to hold rates steady and focus on how inflation is developing.
Related article Fed officials are starting to break rank and join Trump
Traders now expect just a 4.7% chance the Fed cuts rates in July, down from a 23.8% chance yesterday, according to the CME FedWatch Tool.
The Fed’s rate-cutting path has come under increased scrutiny in recent weeks as Trump has continued a tirade against Fed Chair Jerome Powell, lashing out at him for holding rates steady. Some Fed officials in recent weeks had signaled an openness to cutting rates in July.
Seema Shah, chief global strategist at Principal Asset Management, said in an email that the June jobs report signals rate cuts in July are likely off the table.
“A few Fed speakers have shown their inclination to cutting interest rates as early as this month. Today’s data of higher than expected payrolls, a drop in the unemployment rate and a fall in jobless claims completely dispels their case for imminent rate cuts and implies that there is absolutely no urgency for Fed support,” Shah said.
Wall Street was also monitoring developments on Capitol Hill as lawmakers in the House try to pass Trump’s “One Big, Beautiful Bill.” And investors were also keeping an eye out for developments on the trade front. Trump on Wednesday announced a trade deal with Vietnam.
“The stock market is starting off the second half of 2025 on a strong foot, with stocks continuing to make record highs as investors start to price in fading tariff uncertainty and optimism over tax cuts and continued economic resiliency,” David Laut, chief investment officer at Abound Financial, said in an email.
Chris Zaccarelli, CIO at Northlight Asset Management, said in an email that while he has been encouraged by the recovery in the stock market in recent months, he is concerned about expensive valuations and the fact that a lot of good news has already been priced in, leaving the market “more vulnerable to negative surprises.”
“Extreme greed” was the sentiment driving markets, according to CNN’s Fear and Greed index. It was the strongest reading in over a year.
