Weekly Market Commentary June 30th to July 4th 2025
In the holiday-shortened week, ample labor market reports were released along with both the ISM Services and Manufacturing Indices.
On Wednesday, the ADP Employment report showed a loss of -33k jobs, a drastic difference from the 100k that was expected. Although it is also an indicator of private payrolls, the report has been unreliable in predicting the Non-Farm Payrolls number. This month’s numbers followed that trend.
Non-Farm Payrolls increased 147k, higher than the 110k that was expected, with the largest contributor being local and state municipalities, which led all categories. Private payrolls showed an increase of 74k, a positive number but the slowest this year. Overall, employees are experiencing hiring activity near 10-year lows as looming uncertainty regarding tariff policy changes remain an overhang over employers. The Unemployment Rate decreased to 4.1%, the lowest since February and against the forecast for a slight increase to 4.3%.
ISM Services PMI returned to expansionary territory in June to 50.8 from 49.9. New Orders provided the biggest percentage point change showing slight expansion. ISM Manufacturing PMI registered a 49 reading, as New Orders contracted for the fifth straight month in a row.
Markets rallied into the holiday-shortened week. The S&P 500 finished at 6,279, up 1.7%, while the Nasdaq finished at 20,601, up 1.6%, and the Dow Jones Industrial Average finished up 2.3%.
With the Non-Farm Payrolls surprising to the upside, U.S. Treasury yields rallied across the curve with the 2-Year Treasury up 0.16% to 3.89% as market participants are less optimistic about a July rate cut. The 10-Year Treasury increased 0.08% to 4.35%.
Important economic releases this upcoming week include the FOMC Meeting Minutes as well as Consumer Credit.
