WEEKLY MARKET RECAP – JULY 3, 2025

The S&P 500 and NASDAQ extended their record-setting streaks from the prior week, while the Dow ended Thursday just 0.4% shy of its all-time high. For the holiday-shortened trading week, all three major U.S. indexes posted gains of roughly 2.0%.

Thursday delivered the week’s biggest market lift after the latest jobs report came in stronger than anticipated. The U.S. economy added 147,000 jobs in June, surpassing expectations of around 117,000. In a reversal of recent trends, job gains from the previous two months were revised upward. The unemployment rate ticked down to 4.1% from 4.2% in May.

Despite a sharp market drop in April triggered by rising tariffs, U.S. stocks ended the second quarter with solid gains. The S&P 500 advanced 10.6% for the quarter, fueled by monthly increases of 6.2% in May and 5.0% in June. Year to date, the index was up 5.5% as of Monday’s close.

On the policy front, Congress narrowly passed the Trump administration’s budget and domestic agenda bill, which now heads to the White House for final approval. The legislation passed the Senate on Tuesday with a tie-breaking vote from the vice president and cleared the House on Thursday by a narrow 218–214 margin.

U.S. Treasury yields climbed following the upbeat jobs data, reflecting reduced expectations for near-term interest rate cuts. Short-term yields rose most sharply, with the 2-year Treasury ending Thursday at 3.88%, up from 3.68% a day earlier. The 10-year yield rose to 4.35%, up from 4.29%.

Although the U.S. dollar firmed after Thursday’s employment report, it remained near its lowest level since early 2022 against a basket of major currencies. The dollar finished the second quarter down more than 5%, and it had declined 10% year to date as of Thursday.

Small-cap stocks outpaced their large-cap peers for the week, pushing the Russell 2000 Index back into positive year-to-date territory. The index gained 3.6% for the week and was nearly 28% above its recent low from April 8.

Looking ahead, large U.S. banks will soon kick off second-quarter earnings season. As of Thursday, analysts projected average earnings growth of about 5.0% for S&P 500 companies, according to FactSet—a modest pace that would represent the slowest increase since Q4 2023.