New York, July 4, 2025 – Wall Street soared to new heights on Thursday, with all major U.S. stock indexes reaching fresh record levels. The rally was sparked by stronger-than-expected U.S. job data that eased recession concerns and reinforced confidence in the economy’s resilience, despite global trade uncertainties.
The S&P 500 climbed 0.8% to close at a record 6,279.35, marking its fourth all-time high in the past five sessions. The Dow Jones Industrial Average surged 344 points to 44,828.53, while the tech-heavy Nasdaq composite advanced 1% to 20,601.10.
Strong Job Growth Lifts Market Sentiment
Investors were encouraged after the U.S. Labor Department reported that employers added 147,000 net jobs last month, far exceeding Wall Street estimates. The data signaled a robust labor market, suggesting that businesses are confident enough in future growth to keep hiring aggressively.
“There is nothing to complain about here,” said Carl Weinberg, Chief Economist at High Frequency Economics. “You cannot find any evidence of a nascent recession in these figures.”
Adding to the optimism, weekly jobless claims declined, reflecting fewer layoffs and sustained strength in employment trends.
Economic Optimism Ripples Across Sectors
The rally was broad-based, with consumer, tech, and financial stocks leading the charge. Companies that benefit from rising consumer confidence saw significant gains:
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Expedia jumped 3.2%
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Norwegian Cruise Line advanced 2.9%
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Citigroup and JPMorgan Chase rose 2.3% and 1.9% respectively
Meanwhile, Datadog shares soared 14.9% after news that the company will join the S&P 500 index next week, replacing Juniper Networks following its merger with Hewlett Packard Enterprise. This move is expected to attract inflows from index-tracking funds and institutional investors.
Bond Market Reacts Sharply to Data
While stocks celebrated, the bond market saw a sharp reaction. Yields climbed as traders recalibrated their expectations for Federal Reserve policy. The 10-year Treasury yield rose to 4.34%, up from 4.30%, while the 2-year yield—which closely reflects Fed rate expectations—spiked to 3.88% from 3.78%.
With economic indicators staying strong, the odds of a rate cut at the Fed’s next meeting dropped dramatically. According to CME Group, traders now see less than a 5% chance of a rate cut, down from 24% just a day earlier.
The Fed has maintained a cautious stance, with Chair Jerome Powell reiterating the need to observe the impact of President Trump’s tariffs before making any policy changes.
Tariff Concerns Linger in Background
Although the economic data was upbeat, uncertainty around tariffs continues. Many of Trump’s proposed import taxes are on hold but could take effect next week unless trade agreements are finalized. A recent ISM survey revealed that while service sector activity grew last month, companies remain cautious about rising costs due to tariff risks.
“Increased cost from tariffs and the potential for tariffs is impacting cost increases,” said a respondent from the agriculture and forestry sector.
High Rates Weigh on Housing Stocks
Not all sectors shared the market’s gains. Homebuilders suffered, as higher interest rates could dampen home affordability and buyer demand. Lennar dropped 4.1%, and D.R. Horton fell 2.7%.
Global Markets Also Rise
Internationally, markets responded positively to the U.S. momentum. South Korea’s Kospi index rose 1.3%, while Hong Kong’s Hang Seng declined 0.6%, showing mixed sentiment in Asia. European bourses also saw widespread gains.
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