Wall Street is riding high, with the S&P 500 climbing 0.83% to close at 6,279.36 and the Nasdaq jumping 1.02% to 20,601.10. The Dow Jones wasn’t left behind either, gaining 0.77%, it’s now less than half a percent away from its own all-time peak.
That marks the third straight week of gains for U.S. equities. But this isn’t just a summer fling. Investors seem increasingly confident in the economy’s strength, thanks in part to fresh labor data and persistent tech-sector tailwinds.
One of the biggest catalysts? June’s U.S. jobs report. Economists had predicted a gain of 110,000 jobs. The actual figure is 147,000, which is about 33% higher than expected. Unemployment also beat forecasts, falling to 4.1% instead of the anticipated 4.3%.
This upside surprise offered a dose of economic optimism, suggesting that, while inflation remains sticky, the economy isn’t cooling off as quickly as feared.
“There’s a real bout of irrational exuberance but there’s some basis for it,” said Kristina Hooper, Chief Market Strategist at Man Group.
Retail investors, in particular, are leaning into the bullish momentum, largely brushing aside inflation fears, tariff uncertainties, and the slim odds of a rate cut in July.
In the spotlight yet again: Nvidia (NVDA.O). The AI chip juggernaut gained 1.3% Thursday, pushing its market cap to an astonishing $3.89 trillion. That’s just a breath away from Apple’s all-time record, and puts Nvidia in serious contention for the title of most valuable company in history.
If Nvidia crosses the $4 trillion threshold, it’ll be a milestone not just for the company but for the AI-driven tech boom that’s rewriting market playbooks across the globe.
Despite signs of economic strength, hopes for an imminent Fed interest rate cut just took a hit. Traders using the CME Group FedWatch tool now put the odds of a rate cut in July at near-zero. The probability of a 25-basis-point cut in September has also dropped, from 74% to 68%.
In other words, the strong jobs data is a double-edged sword: great for market confidence, but it weakens the case for immediate monetary easing.
Post-market, things got even more interesting: House Republicans passed President Donald Trump’s sweeping tax-cut and spending bill. The legislation adds $3.4 trillion to the national debt and is projected to push millions off health insurance, according to the Congressional Budget Office.
While tax cuts and spending can stimulate short-term demand, they could exacerbate inflation, adding complexity to the Fed’s already tricky position.
With interest rates still uncertain, inflation simmering in the background, and geopolitical risks still in play, this could be the “last bull rush” before things slow down, as Alex Morris put it.
Still, for now, the bulls are firmly in control.
