Weekly Market Insights | Trade and Jobs Cheer Markets in Short Holiday Week

The S&P 500 index rose 1.7% this week to another record closing high as June jobs data came in above expectations. The market benchmark ended Thursday's abbreviated session at 6,279.35, its highest closing level ever. This marked the end of the trading week as the US stock market closed several hours earlier than usual on Thursday and will remain closed on Friday for Independence Day. The S&P 500 also recorded a fresh intraday high on Thursday at 6,284.65. On Tuesday, the S&P 500 locked in a 5% gain for June, marking its second consecutive monthly increase, which resulted in a nearly 11% Q2 jump for the index, wiping out Q1's 4.6% loss. The benchmark is now up almost 7% for the year.

The Nasdaq Composite Index added 1.62% closing the week at 20,601.10. The Dow Jones Industrial Average advanced 2.30% notching nearly all-time highs on July 3rd, 2025 of 44,828.53. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.19% for the week through Thursday.^1,2

Stocks Gain on Trade Developments & Positive Jobs Data

Government data released Thursday showed the US economy added more jobs than projected in June while the unemployment rate unexpectedly ticked down. Total nonfarm payrolls rose by 147,000 last month, surpassing Bloomberg's consensus estimate for a 106,000 increase. The unemployment rate moved down to 4.1% in June from 4.2%, compared with the Street's view for an increase to 4.3%.

Every sector except communication services rose this week. Materials had the largest percentage increase, climbing 3.7%, followed by gains of 2.4% each in technology and financials and a 2.1% rise in energy. Industrials, real estate, consumer staples and health care also logged gains of more than 1% each, while consumer discretionary and utilities also edged higher.

The materials sector's top gainers included shares of Packaging Corp. of America (PKG), which rose 6.8% as the company said it agreed to buy the containerboard business of industrial packaging products maker Greif (GEF) for $1.8 billion in cash.

In the technology sector, First Solar (FSLR) had the largest percentage gain, jumping 22% as RBC raised the price target on the shares to $200 each from $188. RBC said it believes President Donald Trump's "Big Beautiful Bill" has "positive implications for near term and potentially long term demand" for First Solar. The firm kept its investment rating on the stock at outperform.

Communication services, the lone sector in the red, slipped 0.2%.

Shares of Facebook parent Meta Platforms (META) led the drop in communication services, falling 2% on the week. Chief Executive Mark Zuckerberg said the company is reorganizing its artificial intelligence group with a focus on developing AI "superintelligence," referring to systems that can perform tasks as well as or better than humans, Bloomberg reported Monday, citing an internal memo.

Economic data next week will be on the lighter side but will include May consumer credit on Tuesday and the release of minutes from the Federal Open Market Committee's May meeting on Wednesday.

Chart of the Week: The Artificial Intelligence (AI) Theme 

A market observation, the AI theme clearly took off and began its' dominance in 2023 and doesn't appear to be slowing down any time soon given the amount of spending of big tech companies and the widespread adoption throughout our economy.  

As bonus charts (below), I thought I'd share a chart depicting 15-year and 30-year mortgage rates over the past five years and where they are today, the NAHB Housing Sentiment & Components Chart, the Housing Affordability Chart (The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data. An index above 100 indicates that a typical family can afford a median-priced home, while an index below 100 suggests the opposite.), and the US Inflation Rate Chart.

If you compare and take a look at the following four charts, as interest rates went up in 2022 (the Fed, correctly, raising interest rates to combat inflation resulting from excess stimulus from the Covid-19 pandemic) are subsequently now wrong in keeping rates as high as they are right now because the inflation beast was tamed (back down to historical long-term average levels). Simultaneously, prices of home increased which is good, but the housing market (especially in single-family homes) activity declined significantly, and affordability still is at very low historic levels. 

Fed Chairman Jerome Powell enjoys pointing to potential tariffs and inflation as to why he should keep the Fed Funds rate at these levels and not begin cutting (even a little). My guess is despite the pressure he's facing; he'll keep rates as high as he can for as long as he can until he leaves office next year regardless of what that means for families who want to buy and sell primary homes.  There are other factors that need to be discussed with this situation, but this is probably the most frustrating part of Powell's stance.  The cost of mortgage debt with the combination of higher real estate prices affecting primary home affordability.  This keeps more people leasing or renting which I'd argue is not good economically or culturally over the long-term for most Americans. 

Home ownership is great for raising a family, investing in a community, and creating wealth. The large apartment and multi-family housing folks are loving this current set up and don't want it to change because it brings in the cash from rent or lease payments. I guess there are two sides to that coin, and it depends on your socio-economic status. I believe as the Fed lowers interest rates, the housing market will come back to life and positive economic activity will pick up. If you already have say a 3% mortgage prior to Covid-19 pandemic, this situation doesn't affect you as much unless you want or must move your primary home.  

This Week: Key Economic Data

Tuesday: NFIB Small Business Optimism Index. Consumer Credit.

Wednesday: Wholesale Inventories. 10-Year Treasury Note Auction. June Fed Meeting Minutes.

Thursday: Weekly Jobless Claims. St. Louis Fed President Alberto Musalem and San Francisco Fed President Mary Daly speak.

Friday: Federal Budget.

^{Source: Investors Business Daily - Econoday economic calendar; July 3, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

No major companies reporting this week.

^{Source: Zacks, July 3, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets in, their true beauty is revealed only if there is a light from within.”

– Dr. Elisabeth Kübler-Ross

Tax-Deductible Educator Expenses

The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies, and training from their taxes. In this case, an “eligible educator” is a taxpayer who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. They must work at least 900 hours a year at a school that provides elementary or secondary education. 

Educators can deduct up to $300 of trade or business expenses not reimbursed by their employer, a grant, or another source. Some examples of covered expenses include:

• Professional development course fees
  
  
• Books
  
  
• Supplies
  
  
• Computer equipment
  
  
• Other classroom equipment
  
  
• Personal protective equipment (masks, disinfectant, etc.)

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS⁷

Choose In-Season Produce This Fall

Eating healthy is essential to keep you and your family feeling good as the days get shorter and the temperature drops. One of the easiest ways to incorporate fresher, riper produce into your meals is to buy in-season items. Generally, in-season produce, harvested at the right time, is full of flavor and nutrition. Plus, sometimes fruits and veggies cost less when they're in season!

Here are some healthy picks for the fall:

• Apples
  
  
• Beets
  
  
• Brussels Sprouts
  
  
• Carrots
  
  
• Cauliflower
  
  
• Pumpkin
  
  
• Winter squash
  
  
• Raspberries
  
  
• Celery

What are some of your favorite fall produce items?

Tip adapted from US Department of Agriculture⁸

Alexandra’s mom had four children. The first one was named May, the second was named June, and the third was named August. What was the fourth child's name?

Last Week's Riddle: It can be told, played, and cracked, and it can even be practical. What is it?
Answer: A joke.

Mt Cook
South Island, New Zealand

Footnotes and Sources

^{1. WSJ.com, July 3, 2025}

^{2. Investing.com, July 3, 2025}

^{3. CNBC.com, June 30, 2025}

^{4. WSJ.com, July 2, 2025}

^{5. CNBC.com, July 3, 2025}

^{6. WSJ.com, July 3, 2025}

^{7. IRS.gov, November 8, 2024}

^{8.  SNAP-Ed Connection, U.S. Dept. of Agriculture, March 18, 2025}