The Markets (as of market close July 2, 2026)
Last week’s shortened trading week ended on a positive note as stock traders rotated away from many of this year’s leading artificial intelligence and semiconductor stocks and into more traditional blue-chip companies. Markets were closed on Friday in observance of Independence Day, leaving traders focused on Thursday’s June employment report. While hiring slowed from the prior two months, the labor market remained resilient enough to reinforce expectations that the Federal Reserve will leave interest rates unchanged at its upcoming meeting later this month. The Dow, S&P 500, NASDAQ, and Global Dow all finished the week higher, while the Russell 2000 slipped modestly. Health care, financials, and communication services led market gains as Treasury yields edged higher and crude oil prices continued to decline.
Last Week’s Economic News
- Job growth moderated in June. The economy added jobs during the month, below the revised gains recorded in April and May but still above the average pace of the prior year. The unemployment rate dipped to 4.2%, while average hourly earnings increased nicely over the past 12 months. Labor force participation eased slightly, reflecting a gradually cooling labor market rather than a sharp deterioration.
- Job openings remained stable. The number of available positions held steady at in May, while hiring remained essentially unchanged. Total separations increased only modestly, suggesting the labor market continues to normalize after several years of elevated turnover.
- Manufacturing continued to expand. The S&P Global U.S. Manufacturing Purchasing Managers’ Index remained above the key 50.0 threshold for another month, signaling continued growth in factory activity. Businesses reported stronger demand supported by new product launches and inventory building, although rising raw material costs and ongoing job cuts remained areas of concern.
- Unemployment claims stayed historically low. Initial claims for unemployment insurance were essentially unchanged from the previous week, while continuing claims increased only slightly. Overall, the data continues to point to a labor market that is slowing gradually but remains fundamentally healthy.
- Gasoline prices continued to decline. The national average price for regular gasoline fell, extending the recent downward trend as crude oil prices eased following reduced geopolitical tensions in the Middle East. Despite the decline, gasoline prices remain above year-ago levels.
Eye on the Week Ahead
The first full week of July brings several closely watched economic reports, including fresh data on the U.S. services sector, the international trade deficit, and existing home sales. Stock market watchers will continue evaluating whether slowing economic growth and moderating labor market conditions are sufficient to influence the Federal Reserve’s policy outlook later this month.
Have a nice week!
Sincerely,
Robert G. Carpenter