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The week in the markets - July 4, 2025

The U.S. celebrated July 4 with a soaring market and resilient economy

 

  • The S&P 500 reached an all-time high ahead of the July 4 weekend.
  • June's jobs report beat expectations, and U.S. unemployment remained low.
  • The U.S. Congress approved the One Big Beautiful Bill: a $3.4 trillion fiscal package extending tax cuts and reducing spending on safety-net programs.

Although U.S. markets were closed Friday for the long weekend, Thursday's remarkable close provided its own kind of fireworks, as the S&P 500 Index soared to a fresh all-time high. Investor sentiment remained buoyant, supported by a mix of strong economic data and cautious optimism. 

The June jobs report provided a welcome upside surprise. Non-farm payrolls increased by 147,000, outpacing expectations of 110,000 and surpassing May’s revised figure of 144,000. State and local governments contributed heavily to this gain (particularly in education), offsetting slower growth in the private sector. Private-sector payrolls rose by just 74,000, marking their smallest increase since October, as industries including manufacturing, wholesale trade and business services continued to face headwinds.

The unemployment rate beat forecasts as well, dropping to 4.1% from 4.2%. Wage growth moderated slightly, with average hourly earnings rising 3.7% year-over-year, which was the smallest annual gain since July 2024. While the pace of wage increases has slowed, it still signals steady income growth that is outpacing inflation.

Another standout this week was durable goods orders, which surged 16.4% from May to June, the largest jump since July 2014. The increase was led by a sharp rise in transportation orders, particularly aircraft, though gains were evident across other categories as well. This data highlights a rebound in business spending, even as broader economic uncertainties linger.

The U.S. and Vietnam finalized a trade deal, lowering a threatened 46% tariff to 20%. The agreement also set a 40% tariff on goods transshipped through Vietnam, likely targeting components imported from China. In exchange, Vietnam agreed to open its markets and signed a memorandum of understanding for $2 billion in U.S. agricultural products.

The U.S. House of Representatives approved a $3.4 trillion fiscal package in a 218-214 vote, sending it to President Donald Trump for his signature. The legislation extends the 2017 tax cuts and introduces $4.5 trillion in additional tax reductions. It also includes measures such as a permanent increase to the child tax credit and temporary tax breaks for elderly workers, tips and overtime pay. It reduces Medicaid spending by nearly $1 trillion over the next decade, implements work requirements for some recipients and phases out clean-energy tax credits. The package also lifts the U.S. debt ceiling by $5 trillion and allocates funding for military programs and immigration enforcement.

This week’s early reports suggest an economy that, while facing challenges, continues to show pockets of strength. Labour market resilience, durable goods growth and market highs paint a picture of cautious optimism heading into the second half of the year.

With the budget bill now approved by Congress, attention turns to the upcoming July 9 deadline for U.S. trade agreements. This self-imposed milestone may offer additional insight into the global trade landscape. For more insights, tune in to this week’s podcast for our take on what investors could expect.

This week's market closing value - week ending July 4, 2025

(As of 4:00 PM ET.*)

EQUITY INDICESLevelChangeWTDYTD1-year5-year
   CADCADCADCAD
S&P/TSX27,053.29440.411.65%9.40%21.62%11.64%
S&P 5006,279.35124.021.31%0.99%13.34%15.04%
DJIA44,828.531,015.951.62%-0.33%13.98%11.76%
NASDAQ20,601.10330.340.93%0.91%13.20%15.18%
FTSE 1008,822.9124.00-0.82%11.41%14.48%9.48%
CAC 407,696.274.72-0.04%12.20%8.86%10.07%
DAX23,787.45-245.77-1.12%28.56%40.34%14.83%
SXXP541.13-2.50-0.56%14.70%13.81%9.26%
Nikkei39,810.88-339.91-1.41%2.67%8.50%5.91%
Hang Seng23,916.06-368.09-2.18%11.64%31.93%-1.34%
CURRENCY
RETURNS
CADChangeWTDYTD1-year5-year
US$1.3606-0.0094-0.69%-5.41%-0.06%0.09%
Euro1.6021-0.0016-0.10%7.60%8.85%1.01%
Yen0.0094-0.0001-0.57%2.88%11.51%-5.67%
CANADIAN TREASURIESYieldChangeCOMMODITIESUSDChange
3-month2.65-0.01Oil$66.50$1.43
5-year2.920.06Gold$3,337.15$66.37
10-year3.350.04Natural Gas$3.39-$0.35
CANADIAN PRIME RATE
4.95%
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