Overall, the S&P 500 and Nasdaq Composite were up 1.7% and 1.6% respectively, with both indices ending at record highs. The Dow Jones Industrial Average climbed 2.3% and is now less than 1% shy from its all-time high. The market was buoyed by Trump’s tax and spending bill making it through the Senate, and then later the House of Representatives on Thursday.
Investors also welcomed a stronger-than-expected non-farm payrolls report in which the US economy added 147,000 jobs in June. The solid jobs report prompted traders to dial back rate cut expectations for the year. Treasury yields increased following the report on Thursday, with the yield on the 10-year note ending at 4.34%. The US dollar also strengthened following the report, having languished near a four-year low against the euro at the start of the week.
European markets ended the week marginally lower, with the pan-European STOXX 600 dropping around 0.5%. There was a degree of caution, with the 9 July tariff deadline looming and the EU not yet having secured a deal with the US. Renewable energy companies got a boost from the US bill being more positive for the wind energy versus a previous version. Eurozone inflation increased to 2.0% in June, in line with the European Central Bank’s (ECB) target. Speaking at the ECB’s symposium, President Christine Lagarde struck a cautious tone, cooling expectations for additional rate cuts later this year.
While the US managed to strike a trade deal with Vietnam, which helped lift sentiment in many markets, Japanese equities were held back by stalling progress in their own trade negotiations with the US. For the week the Nikkei 225 declined 0.9% while the yen strengthened against the dollar. In Hong Kong, the Hang Seng declined 0.9% however on the mainland the Shanghai Composite was up 1.1% with mixed economic data.