New records for U.S. Independence Day

Wednesday saw another rise in the shares of the largest technology companies, pushing the leading U.S. indexes to new highs. The tech sector within the broad S&P 500 index added more than 1% (+1.34%), driven largely by gains in Apple (AAPL), Nvidia (NVDA) and Tesla (TSLA) – three members of the so-called «Magnificent Seven», which have helped propel the major indexes to record levels in recent years.

Notably, the Mag7 has recovered from the sharp drop triggered by the tariff shock in April. However, recent doubts about their leadership in the artificial intelligence race have dampened enthusiasm among some investors.

As a result, the key U.S. market benchmark – the S&P 500 – rose 0.47%, closing at its sixth all-time high of 2025. The tech-heavy Nasdaq Composite climbed even higher, gaining 0.94% and setting its third record of the year. Meanwhile, the industrial Dow Jones Industrial Average (DJIA) slightly underperformed, slipping a symbolic 0.02%.

Overall, Wednesday’s session can be considered a success – especially given the weak start following the release of disappointing labor market data from ADP. In June, the U.S. economy lost jobs: instead of the expected gain of 99,000, there was a decline of 33,000. Moreover, May’s figures were revised downward from a gain of 37,000 to a loss of 29,000. In other words, the economy hasn’t been creating jobs over the past two months – it’s been losing them. This is clearly a troubling sign and a negative indicator for the broader economy.

Despite this, the market, which opened near flat, managed to push higher. Investors were encouraged by comments from President Trump, who said the U.S. had reached a tariff agreement with Vietnam – reportedly agreeing to cut existing duties from 46% to 20%. A victory, supposedly – though whether it truly is remains to be seen.

The ITS index family also gave investors reason to cheer, with several benchmarks reaching new all-time highs – mirroring the performance of their U.S. counterparts. The ITS Shariah Index (ITSS), in particular, has recently outpaced the ITS World Index (ITSW) in terms of growth and is rapidly closing the gap in absolute value. By the end of yesterday’s session, ITSS was up nearly 1.5% (+1.45%), while ITSW gained 0.31%.

The Shariah index clearly reflects where investors are focusing their attention and placing their bets. Among the top ten performers on Wednesday, nine were technology companies. The only exception was industrial giant Caterpillar (CAT), whose shares have risen for nearly two weeks straight, gaining more than 10% over that period.

However, the best performers across all major indexes were not Caterpillar, but Oracle (ORCL, +5.03%) and Tesla (TSLA, +4.97%). It was especially encouraging to see Tesla among the leaders, after starting the week with a sharp sell-off sparked by yet another clash between President Trump and Elon Musk. On Wednesday, Tesla shares surged nearly 5%, recovering Tuesday’s losses and becoming one of the day’s top gainers across the main indexes.

This rally came despite mixed earnings: the electric carmaker reported a 13.5% year-on-year drop in global sales for the Q2. For the second quarter in a row, production exceeded deliveries. That might not sound encouraging – but the market had expected worse, and Tesla’s management helped ease concerns on Wall Street. The company highlighted its long-term strategy – including investment in autonomous driving software and the development of its humanoid robot Optimus – as key drivers of future growth.

Overall, the day ended on an upbeat note. The indexes reached new heights, and market participants appear ready to head into U.S. Independence Day with confidence and optimism.

 

 

Market outlook for 3 July 2025    

The last working day of the week – which may sound unusual, considering today is only Thursday. But with Independence Day in the U.S. tomorrow and all markets closed, it is Thursday that the week effectively comes to an end.

And today promises to be anything but quiet. The key event this Thursday will be the release of labour market data. These figures are always significant, but after yesterday’s ADP report, they have taken on even greater importance. Analysts expect the U.S. Bureau of Labor Statistics (BLS) June report to show an increase of 111,000 jobs in the non-farm sector, down from 139,000 in May, with the unemployment rate ticking up from 4.2% to 4.3%.

However, according to the ADP National Employment Report released on Wednesday, companies have slowed hiring amid economic uncertainty caused by new tariffs. At the same time, employees are changing jobs or leaving their positions less frequently. The only silver lining is that the correlation between ADP and BLS figures is not particularly strong.

Even so, members of the Federal Reserve – focused on achieving maximum employment – will be watching the new labour data closely, especially in light of ongoing concerns about the possible negative impact of Trump’s tariff policy on the broader economy.

Fed Chair Jerome Powell, despite increasing pressure from Trump to cut rates swiftly, reaffirmed his cautious stance last week. However, this week he acknowledged that a rate cut could be considered at one of the four remaining meetings this year.

All this suggests that market sentiment and the direction of trading today will largely depend on the labour data, which, as usual, will be released an hour before the main session begins.

As for Thursday morning, sentiment can be described as cautiously tense. There is no strong negative mood – which is already a plus – but there is also little to be optimistic about. The one encouraging signal was that equity indexes reached new record highs yesterday.

Still, some investors are starting to question whether this rally is truly justified – and whether a new bubble may be forming. That’s why market participants are acting cautiously and not rushing into purchases.

Global indexes opened in positive territory, but the gains are minimal – just a few tenths of a percent. A similar picture is seen in U.S. index futures. The NASDAQ 100 is leading, but even that rise is limited to just 0.1%.

So, unless the labour data disappoints, trading today will likely remain subdued and hover near flat levels. This would make sense, given it’s the last session before a long three-day weekend. It’s also a shortened trading day, with markets closing at 22:00 Astana time.