Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed Thursday’s shortened trading session well in the green ahead of the July 4 weekend.
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The market received a boost after June’s nonfarm payrolls report showed an increase of 147,000 jobs, topping the expectation for 110,000 jobs and rising from May’s upwardly revised addition of 144,000 jobs. In another encouraging signal for the job market, the unemployment rate fell to 4.1% from 4.2% in May. Economists were expecting a rate of 4.3%.
With lower unemployment, the Fed has less of a reason to cut rates. Its dual mandate is to maximize employment and keep inflation around 2%. Cutting rates stimulates the economy and encourages hiring. Following the nonfarm payrolls report, the odds of a 25 bps interest rate reduction plummeted to just 4.7% compared to 23.8% yesterday. The odds of rates staying between 4.25% and 4.50% rose to 95.3% from 76.2% yesterday.
Meanwhile, the House has voted to pass Trump’s megabill in a 218-214 vote. Two Republicans defected and sided with the Democrats. The House consists of 220 Republicans and 212 Democrats, meaning that the bill wouldn’t have passed if four Republicans voted “no.” Prior to the vote, Democratic Minority Leader Hakeem Jeffries broke the House speech length record after holding the floor for eight hours and 44 minutes. The previous record was eight hours and 32 minutes and was set by Republican Kevin McCarthy in 2021.
Trump has already scheduled a bill signing ceremony at 5 p.m. tomorrow, according to Punchbowl News. Punchbowl added that the initial time was pushed back from 9 a.m. on July 4.
Trump also held a phone call with Russian President Vladimir Putin today. While Trump has yet to release details of the call, Kremlin aide Yuri Ushakov said that the call lasted for about an hour with Putin reiterating that Russia would not abandon its goals in Ukraine. Ushakov also said that Trump requested a quick resolution to the Russia-Ukraine war and that the pair has not scheduled an in-person meeting. However, Russia is open to continuing discussions with the U.S.
The S&P 500 (SPX) finished with a 0.83% gain while the Nasdaq 100 (NDX) closed higher by 0.99%.
