Morning Preview: July 03, 2025
Early Look
U.S. stock index futures remained steady overnight as investors awaited the monthly jobs report, which is crucial for assessing the labor market's health and the Federal Reserve's monetary policy direction. Notably, the Trump administration has lifted export license requirements for chip design software sales to China, a move aimed at easing restrictions on essential technologies. This decision positively impacted shares of major semiconductor software providers, including Synopsys (SNPS), Cadence Design Systems (CDNS), and Siemens (SIEGY).
Recent trading has been relatively quiet, although the S&P 500 and Nasdaq reached record highs on Wednesday, with the Dow just 1% shy of its all-time high, driven by gains in technology stocks and a trade agreement with Vietnam that alleviated some market concerns.
Trade Developments
President Trump announced a new trade deal with Vietnam, reducing tariffs on goods imported to the U.S. from 46% to 20%, which is still higher than the current 10% tariff. This news has positively influenced shares of retailers that manufacture in Vietnam, such as Nike (NKE), Wayfair (W), and ON Holdings (ONON).
Market Anticipation
All eyes are on the nonfarm payrolls report for June, set to be released at 8:30 a.m. ET, a day earlier than usual due to the July 4th holiday. The report is expected to show a slowdown in the labor market, with the unemployment rate projected to rise to 4.3%, the highest in over three and a half years. Trading volumes are anticipated to be light, with markets closing early at 1 p.m. ET.
Global Market Overview
In Asian markets, the Nikkei Index rose by 23 points to 39,785, while the Shanghai Index gained 6 points to 3,461. Conversely, the Hang Seng Index fell by 151 points to 24,069. In Europe, the German DAX increased by 27 points to 23,818, and the FTSE 100 rose by 30 points to 8,805. The S&P 500 has surged 28.19% since the lows of April 7th, marking a significant recovery in just 55 trading days.
Market Closing Prices Yesterday
- S&P 500 Index: +29.41 points (0.47%) to 6,227.42
- Dow Jones Industrial Average: -10.52 points (0.02%) to 44,484.42
- Nasdaq Composite: +190.24 points (0.94%) to 20,393.13
- Russell 2000 Index: +28.84 points (1.31%) to 2,226.38
Economic Calendar for Today
- 8:30 AM ET: Nonfarm payrolls for June (est. +110K)
- 8:30 AM ET: Private Payrolls for June (est. +105K)
- 8:30 AM ET: Manufacturing Payrolls for June (est. -5K)
- 8:30 AM ET: Unemployment Rate for June (est. 4.3%)
- 8:30 AM ET: Average Hourly Earnings M/M for June (est. +0.3%)
- 10:00 AM ET: Durable Goods Orders M/M for May
- 10:00 AM ET: Factory Orders M/M for May
- 10:00 AM ET: ISM Non-Manufacturing Index for June (est. 50.5)
Sector News Breakdown
Consumer
Lucid (LUCD) reported a record 3,309 vehicle deliveries in Q2, a significant increase from the previous year. Tesla (TSLA) ended a six-session losing streak despite reporting its worst quarterly decline in deliveries.
Energy, Industrials and Materials
The U.S. Commerce Department has removed licensing requirements on ethane exports to China, benefiting companies like Enterprise Products (EPD).
Financials
BlackRock Inc (BLK) is in discussions to divest its stake in a natural gas pipeline network back to Saudi Aramco.
Technology, Media & Telecom
Datadog (DDOG) will join the S&P 500 index, replacing Juniper Networks (JNPR). Shares of Synopsys and Cadence rose following the easing of export restrictions to China.
Conclusion
The market is poised for a potentially volatile day as investors digest the upcoming jobs report and the implications of recent trade agreements. The overall sentiment remains cautiously optimistic, with technology stocks leading the charge.