Weekly Market Summary: Record Highs, Gold Rises

Weekly Market Summary: Record Highs, Gold Rises

Wall Street Rally: Record Highs Driven by Jobs Report

Strong U.S. job growth surprises the market

The main U.S. stock indices closed Thursday’s session with strong gains, driven by a solid jobs report that exceeded market expectations.

• The S&P 500 rose 0.83%, reaching 6,279.35 points.
• The Nasdaq Composite climbed 1.02%, closing at 20,601.10 points.
• The Dow Jones Industrial Average gained 344.11 points (+0.77%), ending at 44,828.53 points.

According to the U.S. Department of Labor, non-farm payrolls increased by 147,000 in June, far surpassing economists’ forecasts of 110,000 jobs. Additionally, the unemployment rate fell to 4.1%, below the expected 4.3%.

These figures reinforce the perception that the U.S. economy remains strong, even in the face of geopolitical and trade tensions. Market analysts believe this scenario significantly reduces the likelihood of an interest rate cut by the Federal Reserve (Fed) at its upcoming meeting.

Fed Outlook: Rates Expected to Hold Steady in the Near Term

Financial markets have adjusted their expectations regarding monetary policy decisions. According to the CME FedWatch Tool, there is a 95% probability that the Fed will keep interest rates unchanged at this month’s meeting.

The jobs report virtually rules out a rate cut in July, and now the big question is whether there will be any cuts for the remainder of the year, said Jed Ellerbroek, portfolio manager at Argent Capital Management.

The robust labor market has also led to an increase in U.S. Treasury yields, adding pressure to monetary policy.

Optimism Despite Trade Uncertainty

Despite tensions related to the U.S. government’s trade policy, investors have taken a more optimistic approach. The recent signing of a trade agreement between the U.S. and Vietnam has sparked expectations of potential progress in negotiations with other strategic partners.

Although risks related to tariffs persist, many experts believe the market is prepared to absorb the impacts without significant deterioration. The market will likely be able to digest the effects of tariffs, as long as negotiations maintain a constructive tone.

International Trade and Fiscal Policy: Market Impact

U.S.-Vietnam Trade Agreement Sparks Expectations

The recent announcement of the trade agreement between the United States and Vietnam has captured the attention of international markets. The signing of this deal, which comes just days before the expiration of the 90-day tariff truce initiated by President Donald Trump, has been interpreted as a positive signal by investors.

This agreement comes at a crucial time, as several countries, including members of the European Union, are seeking to avoid the reactivation of U.S. tariffs.

Trump, for his part, has confirmed that his administration will begin sending letters to various nations to inform them about applicable tariffs, which has heightened uncertainty regarding global trade.

Trump’s Mega Tax Bill and Its Economic Repercussions

Another major factor impacting the markets has been the final approval of the mega tax bill pushed by Donald Trump, which has already cleared all legislative hurdles and is expected to be signed by the president.

This ambitious reform not only makes the 2017 tax cuts permanent but also introduces new tax reductions tied to his 2024 campaign promises. Additionally, it allocates extra funds for immigration control policies.

While the immediate benefits of this legislation could boost the economy, analysts also warn about its long-term effects on the fiscal deficit and the sustainability of U.S. public debt.

Europe on Alert Over Tariff Risks and Tensions with the U.S.

In Europe, the outlook is more complex. The continent’s main stock markets closed with losses amid the possibility of a resurgence of U.S. tariffs.

• The Stoxx Europe 600 fell 0.5%.
• France’s CAC dropped 0.8%.
• Germany’s DAX declined 0.6%.

The British pound also came under pressure after a Bank of England official suggested a more aggressive interest rate cut in the near term.

However, some sectors managed to cushion the declines, particularly the healthcare sector, with notable gains in Novartis (NVS), Roche (RHHBY), and Novo Nordisk (NVO).

Meanwhile, relief for European cognac producers following China’s decision not to impose additional tariffs boosted shares of companies such as Pernod Ricard and LVMH.

Commodities: Gold and Oil Under Investors’ Watch

Gold Rises on Weaker Dollar and Safe-Haven Demand

The gold market closed the week with solid gains, mainly driven by the weakening U.S. dollar and increased demand for safe-haven assets. Spot gold prices reached $3,336.39 per ounce, marking a weekly gain of approximately 1.9%.

This rally is partly explained by the uncertainty surrounding U.S. fiscal policy following the approval of the mega tax cuts and the approaching July 9 deadline for tariff decisions from the Trump administration.

Concerns over the U.S. fiscal situation and trade tensions have boosted demand for safe-haven assets like gold.

Additionally, a 0.2% drop in the U.S. Dollar Index (DXY) has made the precious metal more attractive to international investors.

Other metals also posted positive moves: silver rose 0.2% to $36.9 per ounce, platinum gained 1.5% to $1,387.54, while palladium saw a slight decline of 0.1%.

OPEC+ and the Future of Oil: More Output Ahead?

In the oil market, crude prices saw a slight drop in a session marked by low trading volume due to the U.S. Independence Day holiday.

• Brent fell 0.7% to $68.30 per barrel.
• WTI lost 0.75% to $66.50 per barrel.

Investors focused on the upcoming OPEC+ meeting, where the cartel and its allies are expected to agree on a new production increase for August, in an effort to gain market share. If confirmed, this would mark the fourth consecutive monthly increase, with an estimated addition of 411,000 barrels per day.

Geopolitical Factors Influencing Commodity Prices

Beyond supply and demand, crude oil prices are also being affected by geopolitical factors. Among the key issues is the possibility that the U.S. may resume nuclear talks with Iran, which could release additional supply into the market if a deal is reached.

Additionally, uncertainty persists over Washington’s trade policy. According to European diplomatic sources, the lack of progress in trade negotiations with the U.S. could lead to an extension of the current status quo to avoid new sanctions.

These factors are keeping investors in a cautious stance, awaiting clear signals from both OPEC+ and the U.S. government.

Corporate Moves: Mergers, Acquisitions, and Business Strategies

Alibaba, Tesla, and the Rise of Tech Competition in Asia

In the corporate arena, Chinese giant Alibaba (BABA) announced an ambitious subsidy program worth 50 billion yuan (equivalent to $7 billion USD) aimed at strengthening its instant commerce operations amid growing competition in the Chinese market.

This measure seeks to benefit both consumers and merchants on its Taobao platform, as it faces increasing pressure from rivals such as PDD Holdings and JD.com.

Meanwhile, Tesla (TSLA) managed to reverse the negative trend in its sales of China-made electric vehicles, reporting a year-over-year increase of 0.8% in June after eight consecutive months of declines.

However, the company continues to face intense competition from local manufacturers such as BYD and NIO, both of which posted significant sales growth.

Additionally, Elon Musk has taken direct control of Tesla’s sales operations in Europe and the U.S. following the departure of a senior executive. This strategic move comes at a time when the company also faces challenges related to the growing politicization of its brand image.

Major Mergers and Acquisitions Making Headlines

The corporate market has also witnessed significant merger and acquisition moves in recent weeks.

Investment firm KKR agreed to acquire Spectris for £4.1 billion (approximately $5.6 billion USD), surpassing a previous bid from Advent. This deal marks KKR’s third takeover attempt for the British precision instruments company.

In the tech sector, SoftBank (SFTBY) is facing an investigation by the U.S. Federal Trade Commission (FTC) regarding its attempt to acquire semiconductor company Ampere for $6.5 billion. The deal aims to strengthen SoftBank’s artificial intelligence (AI) infrastructure, although the investigation could delay its completion.

Other notable deals include Coinbase’s (COIN) acquisition of LiquiFi, aimed at expanding its services for blockchain businesses and financial institutions.

Regulatory Developments in the Pharmaceutical and Tech Sectors

The pharmaceutical sector has also seen notable regulatory developments. Regeneron Pharmaceuticals (REGN) obtained accelerated FDA approval for its multiple myeloma treatment, Lynozyfic, although additional studies will be required for full confirmation.

Similarly, Merck (MRK) received a priority review from the FDA for an update to the label of its pulmonary arterial hypertension treatment, Winrevair, following positive results from Phase 3 clinical trials.

In technology, Apple (AAPL) received a rating upgrade from Jefferies, citing a potential rebound in iPhone sales during the third quarter, although a slowdown is expected toward year-end.

Additionally, Google (GOOG; GOOGL) was ordered to pay $314.6 million to Android users in California over improper collection of personal data. The company has announced plans to appeal the ruling.

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