U.S. stocks edged higher Thursday following a stronger-than-expected jobs report that underscored the labor market’s resilience, bolstering investor optimism around potential trade deals and fiscal policy progress.
As of 09:32 ET the Dow Jones Industrial Average was up 80 points (0.2%), the S&P 500 gained 24 points (0.4%), and the NASDAQ Composite rose 120 points (0.6%).
Trading volumes were expected to be lighter due to the shortened session ahead of the July 4 Independence Day holiday. Thursday’s gains added to Wednesday’s record closes for both the S&P 500 and the NASDAQ.
Labor Market Shows Continued Strength
June’s nonfarm payrolls increased by 147,000, surpassing expectations of 111,000 and marking an upward revision from May’s 144,000. Job growth in state government and healthcare offset losses in the federal sector, according to data from the Bureau of Labor Statistics.
The unemployment rate ticked down slightly to 4.1%, while average hourly earnings rose 0.2% month-over-month, pointing to restrained wage inflation.
“The good news here is that hourly wages certainly are not getting out of hand,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “They’re subdued at 0.2% and cooler than expected on a yearly basis.”
Additionally, jobless claims fell to a six-week low, reinforcing signs of a robust employment environment.
Federal Reserve officials are closely monitoring labor data as they weigh the impact of trade tensions and consider future interest rate moves. While Fed Chair Jerome Powell reiterated a cautious stance, he indicated rate cuts remain possible in the central bank’s four remaining policy meetings this year.
Trade Developments Boost Sentiment
Market sentiment was further lifted by news that the U.S. struck a trade deal with Vietnam, marking the third such agreement ahead of the July 9 deadline when reciprocal tariffs are set to resume. The deal includes a 20% tariff on most Vietnamese imports and a 40% tariff on goods rerouted through Vietnam—key for sectors like footwear and athletic wear.
Recent developments—including a U.S.-China agreement, Canada’s retreat from a digital tax, and progress with India—have fueled optimism that more deals are likely before the deadline.
The U.S. Commerce Department also eased restrictions on chip design exports to China, as part of the broader U.S.-China trade agreement. Analysts at UBS expect additional country-specific trade announcements and tariff delay extensions, though they warn the Trump administration will likely maintain a tough stance on tariffs overall.
The effective U.S. tariff rate has now surged to 15%, six times higher than it was at the beginning of the year.
Tax Bill Advances in Congress
Investors are also keeping a close eye on progress of President Trump’s tax and spending bill. The Republican-led House of Representatives advanced the legislation Thursday, setting the stage for a vote later in the day. The Senate had narrowly passed the measure on Tuesday.
The bill, projected to add $3.3 to $3.4 trillion to the national debt, has drawn criticism from the Congressional Budget Office, which estimates it could lead to nearly 12 million Americans losing health insurance.
Corporate Movers: Tripadvisor, Datadog
Tripadvisor (NASDAQ: TRIP) shares rose after reports that activist investor Starboard Value acquired a stake of over 9% in the online travel company, according to the Wall Street Journal.
Datadog (NASDAQ: DDOG) also gained after being added to the S&P 500 index.
Oil Slips Ahead of OPEC+ Meeting
Crude prices pulled back Thursday following an unexpected increase in U.S. inventories and ahead of a key OPEC+ meeting this weekend.
At 09:32 ET, Brent crude fell 0.5% to $68.74 a barrel, while West Texas Intermediate (WTI) dropped 0.6% to $67.06.
Both benchmarks had surged about 3% on Wednesday after Iran suspended cooperation with the U.N. nuclear watchdog, fueling concerns about potential supply disruptions from the Middle East.
However, U.S. oil inventories rose by 3.85 million barrels last week, casting doubt on the strength of summer demand.
The upcoming OPEC+ meeting is expected to result in a production increase of 411,000 barrels per day for August.