US stock markets, including the S&P 500 and Nasdaq, reached record highs on Thursday after new employment data exceeded analysts' expectations. The unemployment rate also showed an unexpected drop.
Record Highs in Stock Market
The Bureau of Labor Statistics reported that 147,000 nonfarm jobs were added in June, significantly above the forecast of 110,000. This news boosted stocks: the Dow Jones Industrial Average rose by 381 points (0.9%), the S&P 500 climbed by 0.8%, and the Nasdaq increased by 1%. The unemployment rate dropped to 4.1%, defying the expected rise to 4.3%.
Market Reaction to Fed Guidance
The strong employment data also impacted the bond market: Treasury yields surged. Traders began to shed bets on an interest rate cut from the Federal Reserve. According to the CME Group's FedWatch tool, the probability of rates being unchanged at the July Fed meeting is 95%.
Tax Bill Advancements
Additionally, President Trump's tax legislation gained momentum: the bill passed the Senate and was sent back to the House, where it continues to advance. If passed, it could reshape the corporate tax landscape heading into the fall.
Overall, Thursday was a significant day for the US stock market due to strong economic indicators and legislative advancements. Investors remain optimistic despite uncertainties in trade.
