US stocks rally on tech momentum and trade optimism

U.S. equity markets delivered strong performance this week, with major indexes reaching new record highs. The S&P 500 (SPX) rose 3.44%, and the Nasdaq 100 (NDX) climbed 4.20%, completing a sharp V-shaped recovery with gains exceeding 24% and 30% respectively in under three months.

The Dow Jones Industrial Average (DJIA) added 3.82% on the week, bringing its rebound from April lows to 19.7%—just 3% shy of its all-time high.

Key market drivers

• Investor optimism in tech stocks, especially those linked to artificial intelligence.
• Growing expectations of Fed rate cuts in H2 2025.
• Announcements from the White House regarding a new trade deal with China and progress with 10 other trade partners.
• Market resilience despite a surprise Trump withdrawal from talks with Canada over a proposed digital tax.

Economic Backdrop: Mixed Data, Diverging Fed Signals While core PCE inflation rose in May, U.S. consumer confidence reached a four-month high, fueled by improving household inflation expectations.

Conflicting Fed messages

• Jerome Powell: Warns of a summer inflation uptick and urges patience.
• Bowman & Waller: Support rate cuts as early as July.

The broader picture suggests mild economic slowdown, softening consumption, and rising unemployment forecasts—placing even more weight on upcoming data.

Key economic events – This week Tuesday, July 1 – ISM Manufacturing PMI

• A leading indicator of industrial health.
• Strong reading boosts growth outlook; weak data may support easing.

Thursday, July 3 – Jobs report (NFP + unemployment rate)

• The most impactful data for Fed policy.
• Strong hiring and low jobless rate could delay rate cuts.

Thursday, July 3 – ISM Services PMI

• Reflects over 70% of U.S. GDP.
• Directional shifts may signal broader economic turning points.

Sales team recommendations

• Emphasize tech and AI sectors in client engagement as market leaders.
• Promote ETFs tied to the S&P 500 and Nasdaq as lower-risk entry points for new investors.
• Highlight the importance of upcoming macro data, especially employment figures, as short-term market drivers.
• Caution against potential volatility if inflation or jobs data miss forecasts.

Conclusion

The U.S. market is enjoying a rally fueled by tech optimism and dovish policy hopes—but risks remain. Powell’s statements, trade developments, and critical data releases will likely determine short-term direction.

Stay close to clients, monitor the news closely, and stay ready—opportunities are real, but market sensitivity is high.

(This article was written by the author with assistance from language generation tools to support structure and clarity. All insights and opinions are entirely the author’s own.)