The US equities market saw a positive performance during the week of June 30 to July 3, 2025, with the major indices achieving record highs. The S&P 500, Dow Jones, and Nasdaq all closed around 2% higher, continuing their upward trend during the week. Credit also traded stronger, with US Investment Grade bonds spreads 3 bps tighter and High Yield spreads almost 20bps tighter.
Key drivers were the new Tax Cuts bill approval in the US congress, as well as the unexpectedly strong June payrolls jobs data, which showed robust hiring and a lower unemployment rate. This report fueled optimism about the economy's resilience.
Meanwhile, easing geopolitical tensions and positive developments in trade negotiations, such as Canada's decision to rescind its digital services tax on US tech giants, also boosted investor confidence. Progress in trade talks with other major partners, like China and the United Kingdom, have also contributed to the positive sentiment.
For this upcoming week, investors should adopt a more cautious stance ahead of the July 9 deadline for trading partners to reach a deal with the United States, with levies set to kick in on August 1. Trump already announced today that they will apply 25% tariffs on goods from Japan and Korea, leading to a decline in markets.
